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July sees record ETP inflows

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The year to date has seen record inflows into Europe-listed European equity ETPs, according to the latest figures released by BlackRock, manager of the iShares family of exchange traded funds (ETFs). 

July saw USD36.6 billion flow into global, the highest total for five months and globally the first half of July was dominated by flows into US large caps, with USD9.2 billion for the month and US treasuries with USD3.7 billion for the month). 

BlackRock reports pan-European equity products attracted USD6.6 billion as Greece fears subsided and earnings season started well. China equity flows were volatile, ending the month with outflows of USD2 billion. Interest in minimum volatility ETPs was greater than in previous years, with USD5.9 billion in assets gained year to date

For European-listed products, European equity trackers continued to be a core focus for investors in July, with USD4.8 billion inflows. BlackRock says this theme has gathered so far USD25.3 billion in assets – breaking the previous July YTD record of USD17.9 billion in 2008. 

Ursula Marchioni, Head of ETP Research at BlackRock, says: “In Europe, flows into European equity trackers broke the previous year-to-date record, reached in 2008. After a strong start of the year – mainly on the back of the ECB embarking on a QE programme – the theme went out of favour in April and May, due to the risks related to Greece uncertainty, particularly the political contagion. The renewed interest in June and July signals in our view a ‘buy-on-dip’ approach taken by European investors towards their domestic equity market. Given the strong Q2 earnings season and the double digit earnings growth matched by strong top-line growth from European companies, we expect this theme to continue into the coming months. 

“When it comes to exchange traded products at a global level, July was a month of two halves. At the start of July, investors were influenced by China’s stock market correction and uncertainty around Greece, and safe haven assets like US treasuries and large cap US equities attracted new money. As these issues receded, pan-European and Japanese equity funds regained ground, as did investment grade and high yield corporate bonds. That said, broad emerging market equity funds and products remain out of favour – July marked the third consecutive month of outflows from this category. 

“Global ETP buying and trading levels were strong in July, despite the summer period in the US and Europe typically being quiet. The overall market for ETPs is on course to grow by more than it did in 2014, and fixed income ETPs are particularly benefiting from increased investor interest.”

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