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BlackRock reports record inflow month for global ETPs

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BlackRock writes that USD126.5 billion was added to global ETPs in March, the highest inflow month of the year so far, up from the USD109.7 billion added in February.

Equity flows increased to USD98.6  billion, with fixed income flows staying steady at USD20.1 billion. Commodity flows saw the most notable shift, notching up their first inflow month since May 2023 with USD1.0 billion of buying, driven by silver ETPs.

Cyclicals shine, the firm writes as cyclicality started to come through in precision equity flows, with European small cap flows at their highest level on record, and cyclical sector flows also picking up.

Leaning into cyclicals

Industrials led sector flows in March, with USD1.4 billion added – the highest monthly inflow since July 2023 – followed by materials (USD1.3 billion), while energy (USD0.6 billion) and financials (USD0.2 billion) also recorded positive net flows. This was the first month since October in which tech (-USD0.6 billion) didn’t lead sector buying, with healthcare flows also flipping into negative territory (-USD0.7 billion).

European equity ETPs added USD3.3 billion in March, USD2.8 billion of which went into EMEA-listed ETPs. This is in contrast to February, when the split between EMEA- and US-listed flows was more even. Delving deeper, USD0.6 billion of European equity inflows went into small caps in March (their highest inflow month on record and accounting for c.18 per cent of total European equity flows). Adding to the cyclical tilt, flows into value factor ETPs rose to their highest level since August 2023, with USD1.3 billlion added.

Silver lining?

Silver flows rose to their highest level since January 2021, with USD1.0 billion added in March. This helped push overall commodity flows into positive territory for the only the second time in the past 10 months. These silver inflows went entirely into EMEA-listed ETPs, with EMEA investors simultaneously continuing to sell gold (which recorded USD0.4 billion of outflows at the global level and USD1.2 billion of selling from EMEA-listed ETPs).

The contrast in conviction between gold and silver has been stark, the firm writes: gold flows have been negative for 10 consecutive months, and for 19 out of the past 23 months.

Broad market commodity flows also turned positive in March for the first time since October, with USD0.6 billion of buying, while crude oil ETP flows remained negative at -USD0.3 billion.

Springing into Europe

Global investment grade (IG) credit flows rose to USD4.6 billion in March, with high yield (HY) flows also turning positive at USD0.7 billion. On the other hand, flows into rates ETPs declined to USD6.8 billion. Delving deeper, contrasting trends came through for EMEA-listed credit ETPs vs. the global picture, with IG flows remaining in negative territory in EMEA (-USD0.6 billion), but conviction continuing in HY (USD0.7 billion). EMEA-listed HY flows have now been positive for six consecutive months, with an overall tilt towards EURO HY exposures. EMEA-listed rates flows were depressed, however, in line with the global trend (USD1.0 billion).

Conviction in emerging market debt (EMD) remained low in March, BlackRock writes: the exposure registered USD1.2 billion of outflows, with around half of this coming from EMEA-listed ETPs.

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