BlackRock Global ETP Flows : Holding steady: $66B was added to ETPs globally in October, in line with the $65.7B added in August and $65.5B added in September.
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BlackRock Global ETP Flows October 2023
Annemarie Stephenson, Co-Head iShares UK Asset Manager Sales
Fixed income flows trump equities: equity flows fell from $52.7B in September to $34.3B in October, while fixed income (FI) buying almost doubled from $15.5B to $30B. Flows into both asset classes were largely in line with this year’s average monthly levels ($36.9B for equites and $26.1B for FI).
Across the curve: after a drop off in buying of long-term US rates and a jump in short-term exposure inflows in August and September, flows into short and long-term were almost on par in October ($12.6B and $10.4B, respectively).
A high rate of buying
The pickup in fixed income flows came from a surge in rates buying, with $30.4B added – the highest since March ($35.2B) and nearly double the $16.9B added in September. US rates ETPs took the bulk of the inflows ($29B), with $0.9B added across European rates ETPs. Of this, $0.7B went into broad European rates and a net $0.2B into single country exposures. Similar to 2022, core European ETPs (Germany and France) have been the clear preference for ETP investors seeking euro area rate exposure this year, with a cumulative $1.4B added YTD – on track to be the highest inflow year on record, and significantly above the $0.2B added to peripheral Italian and Spanish government bond ETPs. Outflows from emerging market debt accelerated, with $3.2B of selling in October – the largest outflow month since September 2022.
Here for the duration
Digging deeper into US rates, October flows swung back towards the trend we saw between April-July, when $24.2B was added to long-term exposures vs. $4.2B into short-term. The trend briefly flipped over August-September, with $13.8B added to short-term vs. $5.5B into long-term. In October, buying across the curve was almost on par, with $10.4B into long-term vs. $12.6B into short-term.
In the credit ETP space, outflows from investment grade (IG) accelerated in October, with $4.6B of selling alongside $5B of high yield (HY) outflows. IG outflows since August have mostly come from USD exposures, where $8.4B of the $15B gathered between January-July has now gone out. EUR IG flows have proven stickier: of the $10.2B added from January-July, only $2B has gone out, including $1.5B in October.
Japanese equities remain in favour
On the regional level, US exposures led equity flows, with $24.3B added, but two trends stood out in October flows. Firstly, we saw net outflows from emerging market (EM) equities (-$1.7B) for the first time since Q2 2021. Secondly, there was a tentative return to European equities ($0.4B), after six consecutive months of outflows totalling -$10.5B. Flows into European equity ETPs were driven by EMEA-listed funds ($2.3B), offsetting the $1.9B of outflows from US-listed funds. Broad European exposures were in favour ($0.5B), with the largest inflows since May this year. In European single countries, Switzerland ($0.3B) and the UK ($0.2B) led the way.
Meanwhile, buying of Japanese equity ETPs continued in October, with $3.6B added. This included $0.9B into EMEA-listed ETPs – the highest inflows since June, reversing the $0.7B of EMEA-listed outflows in September. Momentum in US-listed flows appears to have taken a back seat, with buying flat in September and October.
In precision exposures, energy and tech continued to lead sector ETP flows, with $3B and $1.6B of inflows, respectively. Financials recorded a third consecutive month of outflows at the global level (-$2.4B), driven by selling of US exposures (-$3.2B) – which saw their highest outflows since September 2022. Japanese financials, on the other hand, continued to gain inflows, with $1.9B added YTD – already surpassing the $1.5B and $1.2B added in 2022 and 2021, respectively.
Source: ETFWorld.co.uk
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