Global ETP industry sets $70.1bn flow record

The global ETP industry recorded its best first quarter on record with $70.1bn flow, compared to the previous record of $65.5bn set in 2012, according to BlackRock’s ETP landscape report.

Equities accounted for $65.1bn or 93% of flows, with developed markets accounting for $60.5bn in flows. Flows into US equities accounted for $37.3bn, up 80% compared to Q1 2012.

Fixed Income inflows remained strong with $11.6bn, the 8th consecutive quarter with inflows of at least $10bn. Ultra Short-Term, Short-Term and Floating Rate exposures accounted for $9.4bn or 81% of Fixed Income ETP flows

Gold outflows continued to weigh on commodities in March and totalled $9.2bn for the quarter.

“The wide variety of unique exposures that ETPs offer, from Japanese equities to short-term fixed income and minimum volatility, has been a crucial factor in the industry’s strong ongoing growth. Flows through the first quarter reflect how ETP investors can reposition their portfolios to act on market opportunities that they see emerging, even in the midst of continued macro uncertainty,” said Dodd Kittsley, global head of ETP research at BlackRock.

Russ Koesterich, BlackRock global chief investment strategist added: “Investors registered renewed confidence in developed equity markets with record ETP flows in the first quarter. Despite continued market volatility, investors recognize that the fundamentals in the United States are generally favorable, given strong corporate earnings and cheap equity valuations. Rather than the much-discussed “great rotation” from bonds into equities, the first quarter showed investors moving cash from the sidelines into equities, and preparing for a rise in interest rates by rotating within fixed income into short-term and floating-rate ETFs.”

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