Global ETP Flows Surged to Monthly Record, iShares Says

Inflows into exchange-traded products surged in November, the highest monthly global inflows into ETPs for 2023 so far and nearly double the amount from the prior month, amid a continuing rally in the stock market.

Investors poured $127.5 billion into the investment vehicles, the most since a record $155.7 billion in December 2021, according iShares, BlackRock Inc.'s ETF unit. High-yield exchange-traded products saw their largest inflow month ever in November, with $11.6 billion added to the vehicles as the market surged last month.

The S&P 500 was up about 9% in November, on the heels of the Federal Reserve pausing interest rate increases and Congress passing a budget that prevented a government shutdown, while the tech-heavy Nasdaq 100 saw gains of about 11% in November, ending its streak of three previous months of consecutive losses.

High Yield Sees Inflow Record

“High yield had its largest inflow month on record as investors chased the recent rally, fully unwinding the outflows seen in the asset class year-to-date. Once again, investors have selected ETFs to maneuver and implement this risk-on sentiment due to their precision and liquidity,” explained Senior Investment Strategist for iShares EMEA Laura Cooper.

As the market has risen over the past quarter, investors have increasingly stepped off the sidelines to invest more heavily in equities and fixed income. In November, equity flows—also the highest since Dec. 2021—rose to $87.5 billion, while investors added $38.8 billion into fixed income, the highest amount since October 2022.

iShares 2024 Market Outlook Warns Investors

In its 2024 market outlook report, iShares warned investors to get out of cash and back into the markets in the new year, or they would miss growth opportunities in both stocks and bonds.

“While conventional wisdom suggests that a rate cut boosts market performance, historical data shows investors could actually be rewarded the most in a pause period before easing begins,” Gargi Pal Chaudhuri, head of iShares Investment Strategy Americas at BlackRock said in the firm’s forward-looking report.

Contact Lucy Brewster at [email protected].