ETP Flows Slow In September Amid Global Growth Concerns

October 09, 2014

Flows into exchange traded products globally are still on track for a record year despite slowing in September amid uncertain global growth.

Flows totalled $8.9 (€7) billion last month, which was down nearly 75 percent on the $35 billion year-on-year flows from last September and 61 percent month-on-month following the record high August this year. Despite the setback, year-to-date flows now sit at $190.9 billion and are on course to beat the existing record set in 2012 of $262.7 billion, according to data from BlackRock.

The slowdown in flows was a result of uncertain global growth outside the U.S. It saw investors pile into the U.S. and broad developed markets, adding $12.6 billion to U.S. large caps, $3.1 billion to broad developed equities and $2.6 billion to U.S. aggregated bond funds.

Broad-based developed markets equities saw their 14th consecutive month of inflows and remain the fastest growing non-U.S. category.

However, the outlook for Europe did not improve despite the European Central Bank announcing an interest rate cut in a bid to boost credit.  Pan-European and German equity funds shed $1.9 billion in outflows and $3.6 billion, respectively.

Despite the pause in non-U.S. equity ETPs, emerging market equities and Japanese equities remained an interesting investment option. While emerging market equities saw outflows of $1.5 billion they were driven by specific country exposures and not broad emerging market funds.

Concerns around the end of easing and interest rate policy saw fixed income suffer outflows of $2.6 billion. However, this trend seemed to be reversing at the end of the month when U.S.-listed fixed income ETPs gathered $7.3 billion between September 26th and October 3rd, while Europe-listed fixed income ETPs gathered $0.2 billion in the same period.


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