EM ETPs led gains over September says iShares

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iShares by BlackRock writes on the global ETP flows for September, revealing that emerging market (EM) equity flows led the gains with USD8.9B of inflows, making September the largest inflow month for the exposure since March. 

USD82.4 billion was added to global ETPs in September, slightly down on August’s USD96.5 billion.
The firm writes that the pickup in EM came alongside a fall in US equity flows to USD28.2 billion (from USD48.5 billion in August), while European equity flows fell flat, hitting the lowest level since October 2020 the last time there were net outflows from the exposure.

Delving deeper into the EM equity flows, almost half were into US listed EM equity ETPs, which have accounted for the majority of EM equity flows YTD, while EMEA listed ETP flows picked up to USD1.2 billion. 

The firm writes that in line with the overwhelming trend seen over the summer, EM ETP flows were heavily tilted towards single exposures (USD6.1 billion), specifically China.

Credit flows continued in September, with USD2.4 billion added to investment grade (IG) and USD1.7 billion to high yield (HY) exposures. HY flows increased to the highest level since April (USD3.0B), while the pace of buying in IG dropped from August’s USD6.4 billion.

iShares writes that the drop off in headline IG flows masks a pickup in EMEA listed flows to USD2.5 billion the highest level since February with weaker sentiment towards US listed exposures driving the drop off. EMEA listed buying continued to account for the majority of the inflows into global HY ETPs for a second consecutive month (USD1.4 billion in September).

Special mention once again goes to inflation linked bonds, which have been consistently popular since May 2020 and notched up further inflows of USD3.5 billion in September, iShares writes. Rates flows which had been similarly steady up to September dropped to USD2.7 billion, vs. USD5.3 billion in August.

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