With uncertainty about economic growth and Federal Reserve policy, the global exchange-traded product (ETP) industry experienced outflows of $15.0 billion in August, according to the latest ETP Landscape report from BlackRock, the parent of iShares….
This was second month of redemptions this year following very strong asset gathering in July.
Similar to June, outflows were driven by fixed income with $5.3 billion, including $8.1 billion from funds with longer/broader maturity profiles versus inflows for short maturity funds.
This is the largest monthly outflow on record for global ETPs. The previous monthly record for global ETP outflows was in January 2010, when the industry witnessed outflows of $13.4 billion.
News that the Eurozone posted its first economic expansion in 18 months helped fuel record setting monthly flows of $4.7 billion into Pan European Equity ETPs in August.
Overall, equity ETP flows were negative at $9.4 billion as US exposures lost momentum in August, registering outflows of $14.5 billion. However, excluding significant redemptions of $14.0 billion for SPDR S&P 500 ETF (SPY), the world’s largest ETF, US equity outflows were modest at $500 million.
Year-to-date equity ETP flows as at the end of August were $138.5 billion, still well ahead of last year’s pace.
Raj Seshadri, Head of BlackRock ETP Insights, commented: “Investors remained cautious in August due to continued uncertainty about US economic growth and Federal Reserve policy. Many of these investors turned to ETPs to execute their investment views, as the global ETP industry experienced outflows of $15.0 billion in August.
“European equities were a bright spot for the month, as news that the eurozone posted its first economic expansion in 18 months helped fuel record setting monthly flows of $4.7 billion into pan European equity ETPs.
“Despite the outflows in August, overall year-to-date equity ETP flows were $138.5 billion, still well ahead of last year’s pace.
“Continued uncertainty around the timing of the Fed’s tapering, the direction of economic data and potential geopolitical conflict is likely to lead to increased volatility for equity and bond markets in September.”
Source: ETFWorld – ETP Landscape (Blackrock)
According to preliminary figures from ETFGI’s Global ETF and ETP industry insights report, near record net inflows of US$44.08 billion and strong market performance helped to push global ETF and ETP assets to US$2.16 trillion at the end of July 2013. There are now 4,883 ETFs/ETPs, with 9,925 listings, from 209 providers listed on 57 exchanges.
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“Dovish comments from the Fed and positive market performance encouraged investors to put net inflows of US$44.08 billion back into the market through ETFs/ETPs” according to Deborah Fuhr, Managing Partner at ETFGI.
In July, Equity ETFs/ETPs gathered the largest net inflows with US$41.62 billion. North American/US equity ETFs/ETPs gathered the largest net inflows with US$32.99 billion, followed by European equity indices with US$3.51 billion, and developed Asia Pacific equity with US$1.82 billion.
Fixed income ETFs/ETPs experienced net inflows of US$5.1 billion. High yield ETFs/ETPs gathered the largest net inflows with US$3.0 billion, followed by government bonds with US$2.2 billion, and corporate bonds with US$868 million, while inflation-linked fixed income ETFs/ETPs experienced the largest net outflows with US$650 million.
Commodity ETFs/ETPs saw net outflows of US$2.72 billion. Precious metals ETFs/ETPs experienced the largest net outflows with US$2.19 billion, followed by energy, and agriculture with net outflows of US$223 million and US$175 million, respectively.
SPDR ETFs ranks first based on July net inflows with US$17.8 billion, and fourth YTD with US$11.8 billion. Meanwhile, Vanguard ranks first based on net inflows YTD with US$36.17 billion, and third in July with US$7.31 billion. iShares ranks in second place for both July and YTD net inflows, with US$10.9 billion and US$32.47 billion, respectively. WisdomTree and PowerShares rank in third and fifth place in YTD net inflows with US$11.85 billion and US$9.61 billion, respectively.