BlackRock’s November data shows that the year is set to be a record year for ETFs.
Commenting on the report, Karim Chedid, head of investment strategy for iShares EMEA at BlackRock says: “November has been a historic month for ETF flows with a record USD204.6 billion added, centred around US equities. Re-risking from investors in a month where we have had clarity from the US election, a strong earnings season beating expectations and a larger gap in both the macro and equity picture between US and European performance drove USD149.2 billion into US equities.”
November has seen the biggest monthly inflows on record: US equity buying (USD149.2 billion) drove overall ETP flows to a record USD204.6 billion in November. The firm writes that equities were in the driving seat: equity flows of USD163.0 billion offset lower monthly buying of fixed income (FI) ETPs (USD35.1 billion in November vs. USD49.9 billion in October) and commodity flows turning negative for the first time since April (-USD3.6 billion).
US cyclicals lead: flows into US small caps (USD14.4 billion), mid caps (USD9.1 billion) and financials (USD7.7 billion) all increased month-on-month, much like we saw post-election in 2016. Large cap flows (USD86.0 billion) drove the overall buying.
It’s beginning to look a lot like ChristmUS
The passing of the US election and a clear result proved to be a catalyst for investor interest in US equities, with a record USD149.2 billion added globally in November, contributing to the biggest month for ETP flows on record (USD204.6 billion). This eclipsed the previous record set in December 2023 (USD145.9 billion), with the majority coming after the election: YTD flows into US equity ETPs stood at USD547 billion on 4 November, before rising to USD690 billion by month-end.
The US proved to be the main area of equity market conviction in November, with outflows from Japanese equities (-USD2.9 billion), European equities (-USD5.1 billion) and emerging market (EM) equities (-USD3.8 billion) – the first time all three exposures have recorded concurrent monthly outflows since May 2019.
While the vast majority of US equity flows went into US-listed ETPs (USD120.6 billion), it was also a record inflow month for EMEA-listed US equity ETPs (USD23.2 billion). Much like the global trend, US large cap flows led EMEA buying (USD18.9 billion), with a pickup in flows into US financials (USD1.4 billion), small caps (USD3.1 billion) and mid caps (USD1.1 billion).
Cyclicals sleigh
Investors look to have dusted off the 2016 playbook with their allocations – small caps, mid-caps, and financials flows all picked up month-over-month, much like in November 2016. The key difference in November 2024 was the pickup in large cap flows, at USD86.0 billion vs. USD17.9 billion in November 2016.
Delving deeper, small cap flows increased to USD14.4 billion (vs. USD10.4 billion in November 2016, which proved to be sticky money). Flows into mid-caps also rose (USD8.7 billion vs. USD3.3 billion), and financials sector flows were on par (USD7.7 billion vs. USD7.6 billion). Healthcare flows remained negative, at -USD0.9 billion – in contrast to November 2016, when USD3.3 billion was added.
Factor flows also show a clear cyclical tilt, with the biggest month of buying for momentum ETPs on record (USD4.8 billion), while value flows picked up to USD2.1 billion – their highest inflow month since the record USD8.2 billion of inflows in May 2022.
Baby it’s gold outside
Commodities recorded outflows in November, driven by USD1.9 billion of gold selling – although outflows were also seen from other commodity exposures. This takes YTD gold flows back down to USD2.3 billion – still yet to retrace much of the selling from 2021-2023.
Rates flows fell to USD4.4 billion – the lowest level since January 2024 (USD3.9 billion), while investment grade (IG, USD5.1 billion) and high yield (HY, USD3.7 billion) credit buying also fell at the headline level. Emerging market debt (EMD) flows stayed negative for a second consecutive month (-USD1.7 billion), with EMEA-listed ETP flow trends a little more bruising (see more in ‘EMEA ETP flows below).
In the spotlight
2024 is on track to be a record year for global ETP flows, with USD1.6 trillion added YTD, surpassing the record USD1.3 trillion of inflows in 2021.
Fixed income ETPs have registered a record USD411.2 billion of inflows across this year.
Equity flows currently stand at USD1.1T YTD – also on track to be a record. Commodity flows have fallen after November’s outflows and now stand at just USD1.8 billion YTD – still on track for their first inflow year in four, but yet to retrace the USD28.4 billion of outflows from 2021-2023.
November highlights: EMEA ETP flows
2024 is on track to be a record year for EMEA-listed ETP flows, with USD235.2 billion added YTD. In line with the global trend, equities led the way in November (USD29.7 billion). FI flows were flat and registered their lowest inflow month since September 2022 due to outflows from EMD and inflation-linked exposures, as well as reduced buying across rates, IG and HY. Commodity flows turned negative, with USD2.4 billion out.
While the vast majority of US equity flows went into US-listed ETPs (USD120.6 billion), it was also a record inflow month for EMEA-listed US equity ETPs, with USD23.2 billion of inflows. Much like the global trend, large cap flows led EMEA buying (USD18.9 billion), with a pickup in flows into US financials (USD1.4 billion), small caps (USD3.1 billion) and midcaps (USD1.1 billion).
