BlackRock’s iShares Core S&P 500 Ucits ETF (CSPX) is the first European ETF to surpass $20bn (€18.8bn) in assets, as investors seeking a strategic and tactical way to tap into optimism in the US tipped the fund past the threshold.
At the same time, thirst for ‘value for money’ and greater transparency continues to fuel investor interest in ETFs as a portfolio construction tool, BlackRock noted.
US equity ETFs have enjoyed bumper inflows, amassing $19.3bn in inflows in January 2017 alone. This has been driven by a renewed appetite for risk amidst the pickup in the pace of the macroeconomic recovery — shares in US companies may be attractive for those investors willing to take on more risk than investing in bonds.
According to BlackRock, an improved growth outlook for the US economy and rising earnings estimates for US companies could benefit shares, although the performance of shares and the wider economy do not necessarily move in lock-step.
Joe Parkin, head of iShares UK retail and wealth sales, said: “[ETFs] have become more ingrained as a tool to express investment views tactically and over the long term, and are being used extensively across asset classes and geographies.
“We believe ETFs have the potential to surpass $1trn in assets by 2020 driven by the regulatory drive towards fee-based advice, the growth of digital investment, and investor thirst for a varied investment toolkit that allows them to efficiently navigate an increasingly complex world.”