April ETP industry flows doubled in April to USD35.4 billion from USD17.7 billion in March, as flows into fixed income funds accelerated and US equity flows turned positive after two months of outflows.
That’s according to BlackRock’s latest ETP Landscape Report which also finds that global fixed income flows during April reached USD17.3 billion – a ten-month high – diversified across US Treasuries with USD6.6 billion, investment grade corporate with USD3.2 billion, and broad multi-sector funds with USD3 billion
US equities meanwhile, added USD6.9 billion compared to the redemption activity of (USD7.1 billion) from last month amid a strong US earnings season, and gold flows scaled to USD2.9 billion – the highest since July 2016 – indicating demand for perceived safe-haven categories alongside the US Treasury flows.
Wei Li, Head of iShares EMEA Investment Strategy at BlackRock, says: “Flows into commodity ETPs led the inflows in April, with USD1.7 billion added over the course of the month, the highest level of buying since February 2017. The majority of flows went into gold where USD1 billion of assets were gathered as a result of ongoing trade tensions and mixed equity market sentiment.
“EMEA-listed equity ETPs lost USD1.9 billion in April, with the outflows mainly coming from European equity ETPs, which lost USD4.3 billion. A wave of mixed eurozone macro data, combined with stronger earnings expectations for the US relative to Europe, appear to have reduced investor confidence. US equities, on the other hand, have had inflows for 12 consecutive months in the EMEA range, due to strong earnings expectations and robust macroeconomic data.
“Fixed income flows returned to positive territory in April as USD1.5 billion flowed into EMEA-listed ETPs. Emerging market debt and investment grade ETPs continued to be unpopular, with outflows totalling USD475 million. Government bond ETPs remained the most popular within fixed income for a third consecutive month, gathering USD1.5 billion of inflows. Within government bond exposures money once again went towards short-duration ETPs, USD539 million, as the short end of the curve looks appealing to investors given the opportunity to get yield above inflation and at the same time hide in safe havens amidst jittery market sentiment.”
