BlackRock ETP Landscape

BlackRock ETP Landscape : ETP Flows November 2019

BlackRock ETP Landscape: For the third consecutive month, equity ETPs took the majority of inflows with $11.6B added; fixed income flows dropped slightly to $4.3B, while commodity flows turned negative for the first time since April, with $400m out…..

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EMEA-listed ETP Flows October 2019

$15.6B was added to EMEA=listed ETPs in November –the third largest inflow month of the year, and up from $14.3B in October.

Key themes this month:

  1. A big November: Inflows return to EM equity
  2. Merrily on high (yield): High yield flows turn positives
  3. Coal in the stocking?: First outflow month for commodities since April

A big November

EM equity flows returned with a bang in November: the exposure registered its first inflow month in four with a bumper $2.4B added. This is the third largest monthly inflow for the exposure in 2019, and marks a shift after $5.1B of outflows between August and October.

EMD, on the other hand, has been consistently popular amongst EMEA investors in 2019; November marked the ninth month of inflows into EMD this year. Investors showed a preference for local currency ETPs for the second consecutive month (+$1.4B), while hard currency ETPs lost $0.4B.

The inflows across EM into the end of the year look to be in line with the pickup in EM flows that we saw in 2018, and at a higher level (see chart opposite). In December 2018, we saw a large increase in both equity and fixed income flows into EM –$2.4B and $0.9B, respectively.

Merrily on high (yield)

High yield inflows turned positive in November (+$0.4B) for the first time in three months. Although there were inflows at the headline level, investor conviction on the exposure appears to have dampened since earlier in the year: between January and August 2019, just one month of outflows interrupted the climb of inflows into HY.

Despite this, 2019 is still shaping up to be a record year for EMEA-listed HY ETPs,with $7B added so far, compared to -$0.9B in 2018, and a previous record in 2015 of $5.5B.

Elsewhere in fixed income, IG continued to be popular with investors adding another $1.8B in November, in the largest inflow month since June. Rates –which haven’t had a single month of outflows in 2019 –gathered a reduced $0.7B in November.

Coal in the stocking?

After a stellar 6-month run of consecutive inflows, commodity ETPs registered their first outflow month since April. November was the biggest outflow month for commodities this year, with investors selling -$0.4B of commodity ETPs.

Outflows were concentrated in gold ETPs, where investors sold -$0.6B in the largest outflow month this year. Investors also sold -$0.1B of silver ETPs November, off the back of a perceived cooldown in trade tensions and signs of stabilisation in macro data. Despite this, YTD flows into gold continue to remain strong at +$7.5B and flows into silver are steady at +$0.6B YTD.

On the other hand, investors favoured broad market commodity ETPs last month with $0.5B of inflows. This was the largest month of buying for broad market commodities this year. While overall risk sentiment has risen, investors are still seeing some need for portfolio diversification through broad commodity exposure.


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