February was largest inflow month for global ETPs says BlackRock

Outflows

BlackRock reports that global ETP Flows for February marked the largest inflow month for global ETPs on record, with USD131.7 billion added, beating the previous record set in November 2020 (USD126.5billion).  

The firm writes that in line with what happened in November, buying was driven by inflows into equity ETPs (USD108.1 billion) amid outflows from commodities (-USD2.5 billion – primarily out of gold) and fixed income (FI) inflows of USD19.4 billion.   

“Investors used rates-driven market volatility in February as an opportunity to add to risk, with the second largest inflow month for US equities on record (USD61.7 billion) – a huge jump vs January’s flows of USD3.5 billion, and just shy of November 2020’s record USD65 billion,” BlackRock writes.   

Amid this record-setting month for flows, investors showed increased specificity with a significant pickup in global sector flows, BlackRock writes. “February marked a record inflow month for financials (USD9.3 billion) and materials (USD2.4 billion), which have been popular alongside industrials and energy as cyclical and growth-geared sectors.   

“At the other end of the sector spectrum, tech flows also hit a record USD13.5 billion in February, vs USD8.6 billion in January. Quality-tilted sectors have continued to be popular with investors: healthcare flows, for example, returned to positive territory with USD0.7 billion added in February, while traditional bond-proxy sectors like utilities and consumer staples were outliers in registering small outflows.”  

Global fixed income flows for February highlighted a disparity vs equity, pointing to a lack of conviction in rate-sensitive exposures, the firm says. “HY notched up a second consecutive month of global outflows, with -USD1.3 billion of net selling, while global investment grade inflows of USD4.3 billion went almost entirely into EMEA-listed ETPs and masked outflows from US-listed IG ETPs.   

“On the whole, global credit flows have lacked a clear trend since September, following a bumper USD90 billion added to IG and HY between April and August 2020, driven by immense policy support – since then, IG and HY have recorded just USD7 billion of net inflows. There is one bright spot, however, with EMD remaining popular within FI. EMD has seen consistent inflows, with USD2.2 billion added in January and a further USD1.4 billion in February (including USD1.4 billion into China bond ETPs), continuing the inflow trend we have seen in every month since March 2020.”  

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Beverly Chandler
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