BlackRock ETP Landscape iShares

BlackRock ETP Landscape : Global ETP Flows June 2021

BlackRock ETP Landscape: Global flows into ETPs rebounded to $122B in June, up from $97.3B in May, making it the third-highest inflow month of the year (and fourth highest on record).

Sign up to our free newsletters

Global ETP Flows June 2021

The pickup in flows was driven by an increase in equity ETP buying ($101.5B), while fixed income flows dropped slightly ($20.8B).

The first half of the year has been characterised by risk-on sentiment, and this has played out in global ETP flows. The $519B added to equity ETPs globally puts 2021 on track to be a record –and has already surpassed all previous annual flows into equity ETPs.

Key themes in June:

US flows pick up

  • Flows into US equity ETPs increased 2.5x vs. May’s flows, with $71.7B of inflows in June –the second-highest month on record (behind the mammoth $75.7B added in March this year, and ahead of the $61.7B added in February). As is usually the case for flows into US equity exposures, buying was predominantly focused in US-listed ETPs, although EMEA-listed US equity flows also increased from $2.3B in May to $3.4B in June.
  • European equities continued to be popular, with a further $6.2B of inflows in June, albeit slightly down from the $8.7B added in May. International demand remained strong in June: flows into US-listed European equity ETPs ($4.2B) outpaced EMEA-listed European equity buying ($1.9B) for the third consecutive month. At the global level, European equity ETPs have gathered net inflows in every month since November –making this the longest inflow streak since November 2016-November 2017. The $24.4B added to European equity ETPs YTD also puts 2021 on track to be the largest inflow year since 2017.
  • Buying in US ($3.8B) and EMEA-listed ($1.7B) emerging market (EM) equity ETPs also picked up in June –almost entirely into broad EM exposures –but was largely offset by selling out of single country APAC-listed products, resulting in $0.5B of global net inflows for the month.

A tilt to quality

  • Within equity flows, a tilt to quality started to come through at a sector and factor level. Tech reversed the $1.7B of outflows in May with $2.4B added in June –the highest inflow month since the record $13.4B added in March. Meanwhile, financials flows dropped to $2.9B –the lowest since October 2020, and flows into industrials sector exposures fell into negative territory for a second consecutive month (-$1.8B).
  • More and more investors are using sector ETPs as a way to implement granular views, with $108.1B into sector exposures globally YTD vs. $111.8B for 2020 as a whole. Quality factor flows hit $1.6B in June –the highest level since November 2019 –while value flows fell to their lowest level in four months ($2.2B).

Building momentum in spread assets

  • Fixed income flows in June followed a similar pattern to May, despite dropping at the headline level to $20.8B. Global flows into rates exposures picked up to $5.9B –the highest monthly inflows since March 2020 –driven by buying in US Treasury ETPs.
  • In credit, investment grade (IG) flows increased to $2.2B in June, leaving Q2 flows at $9.4B –the highest level since Q3 2020. Sentiment towards high yield (HY) ETPs fluctuated over the quarter, with two months of inflows followed by $0.3B of outflows in June –the third month of selling so far this year. US-listed HY recorded outflows in June, while flows into EMEA-listed products remained positive ($0.2B), albeit below the previous month.
  • Emerging market debt (EMD) remained popular across listing regions, with $2.1B added to EMD ETPs globally in June, slightly down from $2.4B in May. China bonds continued to be popular: buying in China bond ETPs hit $1.1B in June, up slightly from May’s inflow figure.
  • Global flows into fixed income ETPs stood at $139B at the end of H1 –ahead of this time last year, when $126B had been added. Inflation-linked ETPs have been a key focus, with $21.6B added during the first half of 2021 –surpassing the record full-year total in 2020 ($17.3B).

Sustainable ticks up

  • Flows into US and EMEA-listed sustainable ETPs increased to $8.8B in June, up from May’s nine-month low ($5.5B), but shy of the record $18B added back in February amid broad equity inflows.
  • ESG best-in-class funds accounted for just under half of the $5.6B added to EMEA-listed sustainable products in June, led by equity exposures. Best-in-class versions of Japanese equity exposures recorded $0.6B of net inflows –their highest on record.
  • Flows into US-listed sustainable ETPs totalled $3.1B in June. ESG-optimised strategies were popular, while environmental strategies also made a resurgence as the second-most popular sustainable exposure, recording $0.6B of net inflows in June. This was the highest level since January –driven primarily by buying into clean energy exposures –and a recovery from the $0.2B of outflows in May.


Related Articles

BlackRock ETP Landscape : Global ETP Flows September 2021

Editorial Staff

Lyxor ETF Money Monitor August 2021

Editorial Staff

BlackRock ETP Landscape : Global ETP Flows August 2021

Editorial Staff