Fixed income exchange traded products see record $43.8bn inflows globally

12th April 2016


Global ETP flows reached $45.5bn in March according to Blackrock. This was a result of a surge of $32.9bn inflows into U.S. listed ETPs, and $5.6bn in European listed ETPs following the largest monthly fixed income flows on record.

Fixed income set a new quarterly record, with $43.8bn of inflows generated. In March 2016, fixed income amassed global inflows of $15.5bn, with European listed fixed income funds gathering a record $6.8bn.

EM equity ETPs had their best month in three years, generating $9bn in flows. While headwinds still remain for the category, ETP flow data suggests there were signs that negative emerging markets sentiment softened during the month.

Smart beta ETP flows hit a new monthly high generating $7.8bn. Strong asset gathering continued for minimum volatility funds with inflows of $3.2bn for the month, augmented by $1.3bn from factors and $3.3bn from dividend funds.

Equity funds brought in $25.8bn after a rare two consecutive months of outflows. This benefited all market caps, as well as dividend funds. U.S. equity ETPs recorded $18.3bn in inflows during March 2016, following the equity returns beginning to recover quickly from the middle of February. The exception to the overall turnaround for equity flows has been Broad Europe equity. March redemptions of ($8.4bn) were the greatest since the financial crisis.

Returns that exceeded those for most other asset classes, gold ETPs recorded its best quarter since Q1 2009, amassing $12.7bn.

Ursula Marchioni, Chief Strategist, iShares EMEA at BlackRock said: “Global ETP flows broke out after a slow start to the year. Fixed income ETP flows reached a new quarterly high, while smart beta funds hit a new monthly record and emerging market equity ETPs had their best month in three years.

“Global flows showed that investors had a clear preference for risky assets for the first time this year. Equities topped the ETP flow charts for the month, recording $25.8bn of inflows, driven by a strong rebound across equity exposures as global equity markets further stabilised and recouped most of the losses suffered during the first six weeks of 2016.

“In Europe, a record month for European-listed fixed income funds led to $5.6bn of inflows into the European ETP category as a whole. Fixed income was the strongest category, accumulating $6.8bn. Credit ETPs were the main beneficiary, achieving ten times the average monthly flows with a monthly high of $3.9bn in inflows. Equities saw a second consecutive month of outflows as assets continued leaving European equity exposures. The recent euro strengthening versus the dollar, despite additional easing measures by the ECB, led European investors to rotate from domestic equity exposures into emerging equities and global credit.”

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