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Beverly Chandler

ETP flows on track for a record year

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The latest ETP report from BlackRock finds that in September 2015, global ETPs gathered USD28 billion, taking the cumulative flows for 2015 to USD230 billion. The firm says that the industry remains on track for a record year.
 

BlackRock reports that September flows were driven, globally, by US equities – with flows five times higher than in August – and Japan equities, as well as US treasuries. Broad European equities exposure continued to attract flows, although at a slower pace than previous months.
 
In Europe, ETP flows slowed their momentum, gathering USD2 billion for the month – their slowest pace of the year so far.  The majority of inflows went into European broad equities, which slowed down to USD1.7 billion inflows compared with USD4.6 billion inflows in August.
 
The firm says that this low flow figure didn’t impact the broad picture for the year, though – as cumulative flows for 2015 stands at USD60 billion, the highest September year to date figure since 2008.
 
Ursula Marchioni, Chief Strategist EMEA, iShares says: “When comparing September ETP flows for the global and European industries, we find momentum healthily continued at global level, while European investors remained on the side lines. In our view, the main reason for such diverging flow results lies in the Fed decision to delay hiking rates in the September FOMC meeting. This decision drove US investors into their domestic equity market, which did not happen in Europe as the ECB remains at a very different stage.
 
“Outflows from emerging equities (EM) seem to have abated last month. We have also detected a pick-up in interest for minimum volatility strategies focussed on EM – which could represent an early sign of clients wishing to re-gain exposure to the theme, with some downside protection. Q3 outflows for the category remain significant, and while it might be too early to call the bottom of the market for EM, it is an area to watch. The “data so bad, it’s positive again” behaviour we observed on Friday 2 Oct post the non-farm payrolls release means that the expectations for a Fed hike are being delayed – and this could create a tactically positive environment for EM.”
 

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