ETPs post record first half inflows, BlackRock reports

Inflows in exchange traded products (ETPs) for the first half of 2012 have been the largest ever for the global ETP industry, according to research published today by asset manager BlackRock.

In the report ‘ETP Landscape’, BlackRock said ETPs attracted net new assets of more than $100bn during the first half of 2012, with particularly strong demand for exposure to income-producing assets.

The global ETP industry now stands at $1.68tr, and its inflows of $105.0bn during the first half of the year represent a 16% increase on the $90.6bn flows posted during the first half of 2011.

“As global markets continue to be volatile, investors use ETPs to capture new and diversified sources of income. Fixed income ETPs attracted $42.0bn in net new assets during the first half, with investment grade corporate bond ETPs seeing inflows of $15.5bn,” the company said.

Fixed income was the main driver of growth attracting 41% of all inflows with $42bn on the year, or 114% above 2011’s comparable figure of $19.6bn.

Flows into European domiciled fixed income ETPs represented 39% of all inflows for Europe, Middle East and Africa.

Bond ETP inflows of $5.6bn in June were driven by investment grade corporate and bond funds which gathered $3.2bn and $1.1bn respectively.

Other income-focused ETPs, including those with exposure to high dividend equities, real estate and preferred stocks drew in $17.9bn on a year to date basis.

Equity inflows of $11.9bn in June were on par with May, but composition shifted more toward developed equity. US large-cap equity inflows surged to $5.2 billion after tepid to negative flows in the prior two months.

According to the report, gold inflows made a comeback in June gathering $2.2bn after two months of outflows.

“On the flip side, US Treasury ETP listed globally inflows surged in May 2012 to $4.5bn and then fell back in June to have outflows of $132m. Both asset classes offer some perceived safe haven attributes, but flow trends often diverge,” said BlackRock.

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