Global exchange-traded product (ETP) flows reached $32.9 billion in October, according to the latest BlackRock ETP Landscape Report, as the US debt ceiling was raised and the likelihood of Q4 Fed tapering faded under continued signs of slow US economic growth.
European ETP assets have surpassed $400 billion.
The combination of these factors plus additional signs of modest growth in Europe helped to boost flows into developed and emerging market equities.
Year-to-date flows of $194.2 billion remain on pace with last year’s record level, a strong proof point for the secular growth of the industry during what has been a volatile year.
Total ETP assets in Europe crossed $400 billion for the first time thanks to inflows of $4.1 billion in October. Year to date, European inflows stand at $13.6 billion.
At the asset class level, October equity flows of $35.9 billion included $18.0 billion from US exposures. Flows into non-US exposures eclipsed $15 billion for the second month in a row. Year-to date equity flows of $201.3 billion are 72% higher than year-to-date 2012 flows of $117.0 billion.
Pan European equity funds accumulated $7.9 billion, a third consecutive record-breaking month as valuations remain attractive relative to the US. A greater portion of these flows came from European-listed funds than in the prior two months.
Emerging market equity flows reached $2.4 billion, lower than in September but still supportive of the case that the category had been oversold earlier in the year.
While fixed income ETPs experienced outflows of $0.7 billion in October largely due to Treasuries, riskier credit exposures remained popular as the search for income and protection against rising interest rates continued. Flows into high-yield funds hit a 21 month high of $2.8 billion and floating-rate ETPs brought in an additional $0.8 billion.
Raj Seshadri, Head of BlackRock ETP Insights, commented: “As anticipated, investors shifted their attention to the budget and debt ceiling debates in Washington during the month of October. While investors poured $32.9 billion of new money into global ETPs during the month, $24.3 billion of the inflows were registered after October 17th, as investors waited for a resolution to the drama in Washington.
“Despite the volatility of ETP flows throughout the year, overall global ETP flows are at $194.2 billion, on pace with last year’s record level. Equity flows are 72% higher than at the same point in 2012 with $201.3 billion of inflows.
“We’re very encouraged by the growth we’ve seen in the European ETP market this year. European-listed ETPs have seen positive inflows each month since July, and the total AUM for Europe crossed $400 billion for the first time in October.”
BlackRock is the parent of iShares, the world’s largest provider of exchange-traded funds.