BlackRock reported this week that September saw a slowdown in global flows into ETPs, down to USD35.9 billion in September from USD51.2 billion in August, driven, the firm says, by a halving of fixed income buying (USD12.0 billion in September vs. USD23.3 billion in August).
The firm writes that the drop in fixed income flows at the headline level masked huge dispersion below the surface. Better news lies in equities with equity flows holding up relatively well, falling from USD31.4 billion in August to USD31.0 billion in September, while commodities continued their outflows for a fifth consecutive month (-USD6.9 billion).
The challenging markets continue to have their impact on ETFs – not just lowering asset flows but also in forcing issuers and others to be creative in their efforts. Europe’s Equiduct, the pan-European retail exchange, is showing signs of growth in ETP appetite, having announced this week that it has expanded its range of ETPs trading in Apex to include a further 314 ISINs.
The firm writes that over five million retail investors have access to Apex and now the firm is expanding its range of assets classes, exposure and geographies to include commodity, fixed income and currency ETPs, plus crypto ETPs, with an offering from 21Shares.
Our interview this week with Matteo Dante Perruccio from digital asset manager Wave Financial saw him expressing cautious views on the strength of the ETP sector in Europe for crypto-based products.
He cites the speculative run up on bitcoin against which the ETP market boomed up until the onset of the crypto winter earlier this year. “I saw the ETP market boom and it was the worst time to buy bitcoin. I am not sure it’s the right approach for most investors but can see why it appeals from an investment process perspective and as volatility diminishes it will play a greater role as an access product.”
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Beverly Chandler, Managing Editor
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Companies in this issue
Goldman Sachs Asset Management
Tabula Investment Management