BlackRock ETP Landscape

BlackRock ETP Landscape : Global ETP Flows January 2020

BlackRock ETP Landscape: Global flows into ETPs remained strong in January, with $66.5B added, down from a bumper $85.8B of inflows in December (the second highest inflow month on record)……

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Global ETP Flows January 2020

The drop in flows from December can be attributed to less buying in equity ETPs, as fixed income and commodity flows increased month-on-month. Fixed income ETPs gathered $24.9B, marginally up from December ($24.4B), while commodities reversed the -$0.2B outflows in December with $5.1B of inflows – c.60% of this went into gold ETPs.

Key themes in January:

  1. Buying broad: broad developed market (DM) equity flows increase
  2. Coming off highs: high yield (HY) flows fall to $0.2B
  3. A golden start: gold flows increase tenfold

Buying broad

  • Inflows into equity ETPs, while remaining positive, reduced across most exposures in January. Buying in US equities fell by around 60%, to $14.0B, while EM equity flows dropped from $17.1b in December to $5.5B.
  • Broad DM equity ETP flows were an exception, remaining steady for the third consecutive month at $13.4B. Flows into Japanese equity ETPs increased significantly from $0.8B in December to $4.6B in January – although most of this went into APAC-listed funds and can be attributed to c.$4B of buying by the Bank of Japan. Inflows into EMEA-listed Japanese equity ETPs fell to just $0.2B, while outflows from US-listed Japanese equity ETPs increased to -$0.6B.
  • The UK wasn’t alone in leaving the European Union in January, as investors sold Eurozone and German equities, contributing to the first outflow month for European equities since August (-$1B). Flows displayed a domestic selling bias, with EMEA-listed European equity ETPs registering outflows while US-listed counterparts gained inflows of $0.3B.

Coming off highs

  • Buying in fixed income was quite varied in January, with multisector ETPs – those tracking broad bond indices that span across ratings – proving most popular, with $8.9B of inflows. Emerging market debt (EMD) and investment grade (IG) flows also picked up, helping to offset a drop in interest in HY – where inflows fell from $2.9B in December to just $0.2B in January.
  • Reduced interest in HY in January comes after a bumper 2019 for the exposure; HY registered inflows in each quarter last year for the first time (a record $25.5B was added overall). Inflows into European HY and DM HY on the whole last month offset outflows from US HY.
  • IG flows, on the other hand, have been fairly consistent since January 2019, with only one outflow month over this period, in August 2019. Inflows of $4B in January went predominantly into US-focused IG, while money was also added to eurozone and global exposures. UK IG lost $0.2B – the third outflow month for the exposure in the past four.

A golden start

  • Silver registered its first inflow month in five with $52m of inflows in January, as increased market volatility led investors back to precious metals.
  • Gold flows increased tenfold to $3.1B from $0.3B in December, which came after outflows of $1.4B in November. Flows were tilted into EMEA-listed gold ETPs, which gathered $1.7B, leading US-listed flows for a second consecutive month – US gold ETPs gained $1.4B in January, following flat flows in December.
  • Crude oil ETP flows also jumped back into positive territory with $0.9B of inflows in January, following two months of outflows. January’s flows were also the highest monthly inflow since November 2018. Investors didn’t really warm to the commodity last year, with $2.4B of outflows, $1.2B of which came in November and December.


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