Investors in exchange traded products (ETPs) embraced equities in July:
-
Global ETPs attracted total inflows of $22.6bn in July. ETP investors embraced equities, adding $21.0 billion, primarily in US exposures. Ultra-low interest rates and speculation about monetary easing by the European Central Bank encouraged risk appetite. US Large Cap products attracted $6.9 billion while more economically sensitive US Small Cap inflows reached a nine-month high of $2.3 billion.
-
Equity Income strategies remained a major draw for ETP investors. High-Dividend Yield, Real Estate and Preferred Stock ETPs generated a combined $3.1 billion in July. Investor use of higher-yielding Equity ETPs in their search for above average returns has supported year-to-date inflows of $21.0 billion into the category -- 48% above last year's comparable seven-month total of $14.2 billion.
-
Emerging Markets Equity ETPs drew $3.6 billion, split evenly between broad exposure funds with $1.7 billion and country-focused exposures with $1.8 billion.
Appetite for risk drives flows into key fixed income ETPs:
-
Investors seeking enhanced return potential turned to High Yield Bonds ($2.0 billion in net inflows), Investment Grade Corporates ($1.6 billion inflows) and Emerging Markets Bonds ($1.2 billion inflows). Alternatively, safe-haven Government Bond ETPs saw outflows of $3.7 billion globally.
-
Bond ETPs are driving industry flows now more than ever, garnering a 35% share in 2012's first seven months. While all segments of the Fixed Income ETP market have grown, recent growth has been prominent in Investment Grade Corporate, High Yield and Emerging Markets, representing some of the market's higher-yielding segments.
-
Fixed Income ETP flows have displayed stamina through recent periods of both rising and falling US interest rates, bolstering the case for continued growth in this category through changing yield scenarios. For example, between year-end 2008 and 2009, a period during which 10-year Treasury yields increased 160 basis points. Fixed Income ETPs attracted more than $60 billion, led by Government and Inflation ETPs with combined inflows of $28.5 billion. Investment Grade Corporate and High Yield together contributed $20.2 billion during that period.
Dodd Kittsley, Global Head of ETP Research for BlackRock, commented: "The continued robust growth in ETPs globally is a testament to the efficiencies that they can deliver including transparency, liquidity and precision in a diverse set of asset classes. 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."
Click here to view report
|
