BlackRock reports July global inflows slightly down on record breaking June

Inflows

BlackRock’s global ETP report for July 2020 reveals inflows were down from June’s record levels, with USD69.5 billion added in July, compared with the USD71.5 billion of inflows in June. 

Fixed income led the way, in a continuation of one of the key flow trends of 2020, while a record month for gold led to USD9.4 billion of inflows into commodities, and equity flows totalled USD18.2 billion. 

‘Back at ‘EM’’ says Blackrock, as flows finally returned to emerging market (EM) equity last month for the first time since January, with USD2.0 billion added globally over the course of July. 

In a departure from recent trends, money was added across listing regions, whereas in June, inflows were largely APAC-domiciled. Delving a bit deeper, single country ETPs were the main beneficiaries of the turn in sentiment, with China ETPs in particular drawing inflows, the firm says.

“The inflows into EM equity come amid the first month of selling out of US equity since August 2019, with USD2.2 billion of outflows. This was driven by selling out of US-listed products, while EMEA and APAC-listed US equity products registered inflows. The figures also highlight the trend we’ve started to see over the past eight weeks of investors in US-listed products looking to diversify outside of the US. In June, flows into US-listed products drove buying in European equity, and in July, flows into US-listed EM equity ETPs made up almost half of the global EM inflows. Buying in EMEA-listed products drove inflows into European equities in July, making up 90 per cent of the USD2.9 billion global net inflows into European equity ETPs. These inflows came amid concrete progress on the European Recovery Fund, and were tilted towards large cap and broad market exposures.”

Turning to gold, BlackRock notes that flows have continued to set new monthly records in 2020, and July was no exception, with inflows of USD9.3 billion which beat the previous record set in April (USD9.2 billion).

“Inflows were split across listing regions indicating global demand, albeit led by US-listed products, as we saw in April. Silver was also in focus in July and notched its own record inflow month (USD1.5 billion), beating the previous record set in May by USD0.3 billion. Flows into the previous metal now total USD4.8 billion in 2020 – more than the total net inflows from 2013 to 2019, although it is worth bearing in mind that the universe of silver ETPs has risen since 2013.”

Another trend was investors adding into sustainable products, with a further USD5.1 billion of inflows in July. “Inflows into EMEA-listed products have outstripped US counterparts since April, and this continued last month, with EMEA-listed flows accounting for 63 per cent of all buying. Global inflows into sustainable products this year now total USD33.5 billion, already surpassing 2019’s record total of USD27.2 billion,” BlackRock writes.

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