US equity ETPs see highest inflows in July

US equities exchange traded products have seen the highest inflows in July, according to BlackRock Investment Institute’s ETP Landscape Report.

Of the total $22.6bn inflows, $21bn was committed to equity products. US large caps saw inflows of $6.9bn, while the more economically sensitive small caps reached a nine-month high of $2.3bn.

Dodd Kittsley, global head of ETP research for BlackRock, said: “The highest monthly flows into equity ETPs since January and flows in July into higher yielding fixed income ETPs suggest an overall increase in risk appetite among ETP investors.”

In terms of strategies, investors remain committed to income generating products. High dividend yields, real estate and preferred stock ETPs brought in a combined $3.1bn over the last month. Year to date, the category has seen inflows of $21bn as investors continue to seek above average returns.

Emerging markets have seen positive flows in both the equity and bond spaces, with $3.6bn and $1.2bn committed to the region, respectively. Emerging markets have been driving the growth in the bond space, along with other higher-yielding segments, such as investment grade corporate and high yield bond ETPs.

Government bond ETPs, on the other hand, have lost their safe haven status in the eyes of investors. In July they lost $3.7bn globally.

Although flows into fixed income ETPs slowed to $2.4bn last month, the asset class continues to drive industry flows. Over the first seven months of the year it has reaped 35% of all inflows, totalling $44.4bn, or 94% above last year’s comparable figure.

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