ANNOUNCEMENT: Expert Investor is now PA Europe. Read more.

Global ETP market buoyed by Asia, as Europe and US lag

Equity net inflows plummet to $2.8bn in April, down from $76.2bn in March


Pete Carvill

New figures from Blackrock indicate that inflows into global ETPs fell last month to their lowest level since March 2020.

According to the firm, inflows of just $27.4bn were recorded in April, sharply down from $117.4bn in March. While inflows dropped across asset classes, they fell most acutely in equities, where just $2.8bn was added (down from $76.2bn in March). Fixed income flows fell slightly from $25.5bn to $18.8bn, while commodity flows tempered to $3.6bn.

While emerging markets performed best, the worst performances were seen by the US and Europe. Europe, in particular, saw investors continuing to sell European equity ETPs totalling $2.5bn.

Blackrock wrote: “Sentiment towards sustainable ETPs remained under pressure in April, with inflows into Emea- and US-listed exposures dropping to $4.41bn. Europe gathered the lion’s share of inflows ($3.4bn), while the US dropped to $1.1bn – half the level seen in March.”

It added: “Within European flows, global clean energy strategies ($260m) continued to dominate, followed closely by US exposures, including S&P Screened ($250m) and USA Optimised ($226m). Across sustainable strategies more generally, equity ESG Screened recorded the highest inflows for the month with $774m add, while equity best-in-class saw net outflows of $404m. On the fixed income side, in contrast, inflows into best-in-class strategies ($6m) rose significantly on the month.”

This downturn seems to have been in the making for some time. In last month’s Global ETP Flows, Blackrock placed the blame for the slowdown in the European market to the invasion by Russia of Ukraine.

Writing then, Blackrock said: “Given Europe’s proximity to the conflict in Ukraine, European equity flows (-$6.5bn) turned negative in March for the first time since October 2020, with the largest outflows since August 2019. Selling was led by Emea-listed European equity ETPs ($5.5bn), which registered their largest monthly net sell on record. In contrast, March outflows from US-listed European equity came in at $1.2bn, following a year of consistent allocation to the exposure and with little signs of selling out.”