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BlackRock iShares see $130bn of inflows as ETF industry hits record

US funds giant BlackRock said its iShares business had seen $130bn of new inflows during 2015 as strong retail and institutional demand drove the global exchange traded funds (ETFs) to post a record annual increase of $347bn.


PA Europe

BlackRock said it had seen $97bn (£66bn, €90bn) of inflows in the US compared with $82bn in 2014, while Europe had seen $34bn in inflows up from $20bn in 2014. Global assets under management at iShares exceeded $1trn as of 31 December, 2015.

“Institutional and retail investors are using ETFs more and more, whether as tools to express a view on almost any financial market, or for long-term core investments,” said Mark Wiedman, global head of iShares at BlackRock.

Wiedman said that bond ETFs had an exceptionally strong 2015, growing at an annual organic rate of 22% globally.

BlackRock said its iShares had seen $50bn of global inflows last year representing 54% of all new flows into bond ETFs.

It said institutional investors accelerated the use of ETFs as substitutes for futures and swaps in 2015.

“As banks’ balance sheet costs have ratcheted up, so too has the cost of using futures and swaps. ETFs are now typically a more efficient substitute for major global equity indices and for bond indices like credit derivatives,” Wiedman said.

European growth

Rachel Lord, head of EMEA iShares at BlackRock, said that in Europe the net inflows of $34bn accounted for 42% of the total industry flows in the region.

“This was largely driven by investors seeking fixed income and European equity exposures,” Lord said.

“Over the course of the year, we established a variety of product and distribution partnerships with private banks, brokerage firms and wealth managers across the region – a strong indication that advisers and asset allocators are increasingly looking to ETFs as the most cost-efficient, flexible building blocks for their client portfolios, in a fee-based environment,” she said.