BlackRock Global ETP Flows : Global flows into ETPs fell to $86.5B in November, down from $114.2B in October, with propensity for risk dropping off towards the end of the month as Omicron-related concerns hit the tape.
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Global ETP Flows November 2021
The fall in flows came as a result of reduced buying across equity ($72.0B) and fixed income ETPs ($14.0B), with flows into the latter reaching their lowest level since March 2020, when -$28.0B was lost.
Commodity ETP flows hit positive territory for only the second time in six months, with $1.3B added amid the broader market volatility.
EM with your flows so bright
Flows into EM equity ETPs this year have already reached record levels: inflows have hit $70.5B YTD, surpassing 2018’s record ($62.2B) and dwarfing the flat flows in 2020. While broad exposures led EM equity buying during the first half of the year, in the second half of the year we have seen this reverse, with regional and single market ETPs – particularly China and Brazil – accounting for the majority of flows. In fact, since the start of July, regional and single country EM equity ETPs have totalled $24.2B, compared to $7.9B into broad EM ETPs, highlighting a more selective approach by investors (see chart).
Jingle bells swing, inflation bells ring
Flows into inflation-linked bond ETPs continued in November, with $5.1B added – the second-highest inflows on record after October’s $6.5B. Investors also added to rates ETPs with a further $6.2B of inflows in November, predominantly into US rates, continuing an inflow streak that stretches back to March.
Flows into investment grade (IG) and high yield (HY) bond ETPs diverged for a second consecutive month, with IG ETPs registering inflows ($2.0B) and HY seeing outflows ($0.5B), largely moving in opposite directions to October
EMD flows rebounded to $0.6B in November, after marginal outflows in October. Looking below the relatively lacklustre headline figures, investors have been allocating to Chinese bonds consistently across the year – accounting for the majority of inflows over the past three months – but this has been offset by selling out of broad EMD exposures.
5 gold rings
Buying in gold ETPs returned to positive territory for the first time since July, with $0.7B of inflows in November, spread across listing regions. The inflows came consistently across the whole month, not just at the end of the month when market volatility picked up.
Sector ETP flow trends reflected the change in market sentiment in the last week of the month, with outflows from financials, materials and industrials, and increased flows into tech ETPs ($2.9B – the joint highest week of inflows for the sector on record).
Overall, financials flows dropped to the lowest level since outflows in September 2020, with just $0.1B of inflows in November – a significant drop from $4.6B added in October. Energy also registered a second month of outflows in four, with $1.6B out. Tech flows persisted at $4.8B across the month, healthcare flows increased to $1.6B, and materials flows turned positive for the first time since June, with $0.9B of inflows.
A green-themed tree
Sustainable ETP flows continued their momentum, with combined net inflows into US and EMEA-listed ETPs rising from $10.0B in October to $12.2B in November – the fourth-highest inflow month of 2021. EMEA-listed products led, with $8.6B of inflows vs. $3.3B for US-listed counterparts.
EMEA-listed sustainable flows continued to be driven by equity best-in-class strategies ($4.3B), which in turn were led by US ($1.5B) and global exposures ($0.9B). ESG tilt strategies had their strongest month since January, with flows rising from $0.7B in October to $1.0B in November. Flows into climate strategies came in at $0.8B, with the majority going into Eurozone Paris Aligned Benchmark (PAB) strategies. This was, however, slightly down on the $1.0B added in October, which was a record for 2021. Within fixed income, flows into green bonds picked up markedly, with $0.1B added in November for their second-best month of the year.
US flows came in on the monthly average for 2021, with $3.3B. Equity flows dominated, with ESG Optimised strategies seeing a marked increase from $0.7B in October to $1.1B in November. At the other end, Environment based strategies returned to their 6-month flows average, dropping back to $0.2B for November vs $0.6B in October.
Source: ETFWorld.co.uk
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