The Exchange Traded Products (ETP) industry maintained its strong start to the year in February, attracting USD18.4bn in net new assets during the month according to BlackRock’s latest ETP Landscape Report.
Global assets held in ETPs reached USD1,720bn at the end of February 2012, an increase of 12.8% year to date, with combined inflows for January and February standing 111% higher than recorded in the first two months of 2011.
“February’s market data provide further evidence that ETPs are increasingly a key building block for constructing the dynamic portfolios investors need today, given their ability to tap market returns and access a full range of asset classes and global markets in a targeted, transparent and low-cost way,” said Steve Cohen, managing director at BlackRock.
Investors continued to rediscover their appetite for risk in February, as tensions over the European sovereign debt crisis eased and better-than-expected economic numbers were posted in the US Emerging markets equity ETPs saw significant inflows as a result of this trend, gathering USD7.9bn of new assets in February and USD14.5bn on a year to date basis. This represents the strongest ever start to a year for the category and is in contrast to the outflows experienced in the second half of 2011.
The trend towards risk assets was also evident in fixed income products. Investors favored investment grade and high yield corporate bond ETPs during February, which gathered USD3.2bn and USD2.7bn in net new assets respectively, whilst government bond products saw outflows of USD2.5bn. These two corporate bond categories have gathered 96% of all fixed income ETP flows so far this year, attracting assets of USD12.9bn in total. Fixed income ETPs accounted for 23.9% of all ETP inflows in February.
As tensions in Iran helped to drive up oil prices, energy equity and commodity ETPs also gathered strong flows for the second consecutive month. The inflows totaled USD2.2bn in February.
On a regional basis, US ETPs gathered USD13.9bn in net new assets in February and Canadian ETPs attracted USD3.0bn during the month. The European ETP market also grew, adding USD1.7bn in new assets, much of which was driven by interest in emerging markets equity ETPs.
