BlackRock’s ETP Landscape report for November 2017 reports that global ETPs gathered USD52.6 billion in November, including USD40.9 billion in equity funds which drove year-to-date equity fund flows to USD404.5 billion, led this month by US and broad developed markets (DM) equities and bolstered by fixed income.
US equities drew in USD17.4 billion including USD5.5 billion across cyclical sector funds and with strength in momentum and value factor funds amid a backdrop of solid economic growth, according to BlackRock.
Broad DM equity funds collected USD9.6 billion spurred by strong earnings and economic data coupled with accommodative central bank policies, while fixed income funds captured USD11.0 billion for the month, led by investment grade corporates with USD4.1 billion and inflation-protected bonds with USD1.2 billion.
Patrick Mattar, from the iShares EMEA capital markets team at BlackRock, comments on the following five key stories behind the European ETP flows in November 2017:
1. ‘Tis the season to be diversified: November was another large inflow month for EMEA-listed broad developed equity ETPs, continuing the trend we’ve seen in four of the last five years where this category receives more inflows in Q4 than any other quarter. A theme that has endured throughout 2017 is US-listed ETPs allocating to broad developed equities. In 2017 so far, these US-listed funds have added USD91 billion.
2. Ding dong Europe on a high: EMEA-listed European equity ETPs have now had 15 consecutive months of inflows. For the first time since July, US-listed European equity funds also had inflows, adding USD716 million. This inflow to US-listed products coincides with a rally in the EUR/USD cross rate i.e as the euro strengthens against the dollar, US investors look to Europe.
3. Fixed income all ye faithful: One of the dominant themes in fixed income this year has been flows into EMD ETPs, especially in Europe where USD8 billion has been added. While EMD has struggled in Q4, USD and EUR IG have done well.
4. Rocking around the EMD: November was just the second month of the year with outflows from emerging market debt ETPs, which lost USD750 million. The majority of outflows in November were from hard-currency products.
5. Baby it’s gold outside: USD747 million was added to EMEA-listed gold ETPs in November, making it the biggest inflow month since February. The divergence in flow patterns between US-listed and EMEA-listed gold ETPs has been an enduring theme this year. In November, the trend continued as US investors withdrew USD175 million as European investors added to holdings.
