BlackRock, the world’s largest asset manager and parent of ETF giant iShares, has released its latest ETP Landscape Report, which details trends in the global exchange-traded products industry. The report is summarized below.
According to the latest ETP Landscape Report from BlackRock, the pace of ETF asset gathering in 2015 represents the fastest start to any year on record.
Global ETP flows of $50.0bn in February rebounded from moderate levels in January. The pace of asset gathering in 2015 represents the fastest start to any year on record.
Inflows were focused in non-US developed markets equities and corporate fixed income as European equity markets rallied and credit spreads tightened.
Pan-European equity funds brought in $8.9bn to set a second consecutive monthly record. Quantitative easing by the ECB, better-than-expected economic data and a weaker euro extended the inflow streak to four months. Total Europe equity asset gathering was $11.5bn and has reached $22.3bn in 2015.
Investors were also encouraged by news of a four-month extension to the Greece bailout, which eased short-term market tensions in Europe. The Stoxx Europe 600 index has risen 14.5% year-to-date (5.9% in US dollar terms).
Though the euro did not depreciate as much as in January, US dollar-hedged ETPs with pan-European and German equity exposures remained popular. They accumulated a combined $3.8bn and EAFE exposures contributed another $2.5bn.
Fixed income funds gained momentum in February led by corporate bonds, which brought in a record $9.6bn to beat the previous best of $7.1bn from January 2012.
High-yield corporate fixed income funds surged to a new monthly high of $5.2bn and investment grade corporate debt added $4.5bn.
Uncertainty over the pace of monetary tightening in the US and a rise in yields impacted demand for rate sensitive ETPs. Treasuries saw inflows of $3.3bn in February, with just over half going to short maturities as investors seek to mitigate interest-rate risk.
US equities stabilized after the sharp decline in January, gathering $3.9bn led by large cap funds. Flows were moderate given dovish comments from Fed Chair Janet Yellen in her testimony before Congress and further improvements in the labour market. Both contributed to strong stock market returns.
Sector funds saw net redemptions, with inflows for energy funds more than offset by withdrawals from technology, financials and utilities.
Japan equities posted a third straight month of inflows with $2.9bn as stocks reached their highest level since May 2000, bolstered by better economic data. Asset gathering was split between US- and Japan-listed funds.
EM equities, including both Broad EM and country funds, snapped a five-month trend of outflows, bringing in a combined $2.7bn. Inflows were concentrated in China equities with $1.6bn, largely locally-listed funds, with broad EM adding $0.7bn.
Commodity funds added inflows of $3.5bn and have now brought in over $10bn in the past three months. Crude oil funds gathered $1.7bn as oil prices stabilized and gold accumulated an additional $1.1bn despite low inflation expectations.