EMEA-listed ETPs recorded strong inflows of $5.5 billion in June, more than double the $2.4bn gathered in May, amid robust demand for fixed income and commodity products, according to the latest EMEA ETP flows report from BlackRock.
EMEA-listed ETP flows were led by strong demand for fixed income and commodity exposures in June.
Fixed income
Fixed income ETPs attracted $6.3bn net inflows, marking a nine-fold increase on the previous month.
Investors keenly sought out investment-grade ETPs which gathered $3.6bn, the largest monthly inflow into the exposure since March 2016.
Within investment grade, most of the inflows went into euro credit ETPs.
According to BlackRock, the uptick in demand for investment-grade ETPs was a direct result of easier central bank policy – the segment recorded its highest ever weekly inflow of $1.4bn during the week of the Fed meeting and ECB Sintra conference.
The Fed and ECB meetings also increased demand for high yield ETPs which gathered $1.1bn during June with most ($0.9bn) coming in the same week as noted above.
Conversely, inflows into rates ETPs dropped to $0.6bn in June, while flows into emerging market debt ETPs were flat at just $35m.
Commodities
Commodity ETPs enjoyed their largest inflow month of 2019, adding $2bn.
Gold ETPs recorded inflows of $2.5bn, the largest monthly inflow into the precious metal since February 2016 when $2.7bn was added. June also marked the second consecutive month of inflows for gold ETPs this year.
The majority of inflows came at the beginning of the month with $1.7bn added in the first week, setting a new record for the largest ever weekly inflow into gold ETPs.
The strong demand for gold raised the commodity’s year-to-date inflow figure to $3.8bn, compared to $2.9bn gathered throughout 2019.
BlackRock notes that, outside of gold ETPs, there has not been a flock to safe-haven exposures despite increased market volatility this year. Rates ETPs, for example, had their second-lowest inflow month of the year.
Equities
Equity ETPs suffered outflows of $3.8bn during June. Only US equity and emerging market equity ETPs recorded positive net flows, gathering $1.1bn and $0.2bn, respectively.
EM flows have lacked conviction over the past couple of months, shedding $0.3bn in May. This marks a turnaround from the beginning of the year where the segment hauled in over $2bn net inflows in each of the first three months of 2019.
Investors continued to sell European equity ETPs in June, with $1.8bn flowing out, while Japanese equity ETP flows were fairly flat for another month at $0.1bn net redemptions.