Global Fixed Income ETPs Exceed $500 Bn For First Time In History

Global Fixed Income ETPs Exceed $500 Bn For First Time In History

October saw another strong month for flows into US high yield and investment grade corporate debt  

Editor, Europe
Reviewed by: Rachael Revesz
Edited by: Rachael Revesz

Fixed income exchange traded products (ETPs) have hit a new record for global assets at over $500 billion for the first time as investors were relieved that the U.S. Federal Reserve halted interest rate hikes, according to new figures.

The latest Landscape report from Blackrock found that investors piled $36.2 billion into ETPs in October, with the strongest flows heading into U.S. equities, followed by high yield ($6.1 billion) and investment grade corporate debt ($4.4 billion).

Ursula Marchioni, chief strategist EMEA, at iShares, said October flows were driven by the Federal Reserve's decision to hold interest rates in September, triggering a risk-on environment in global markets.

“As a result, global fixed income ETPs recorded strong inflows across investment grade and high yield – with some of these flows coming at the expense of U.S. government bond fund outflows (-$747mn),” she said in a statement.

Fixed income gathered $14.7 billion in October across the world, pushing year to date flows at $88 billion and breaking last year’s record overall of $85.8 billion. The increase might seem marginal from 2014, but is a much bigger difference when compared with global fixed income ETP flows from earlier years: 2012 saw $70 billon inflows, and 2013 gathered just $27.1 billion. Total fixed income ETP assets now stand at $502.3 billion.

However, Treasury funds saw redemptions of $1.2 billion as rate rises appear off the table for now.

Rachael Revesz joined in August 2013 as staff writer. Previously an investment reporter at Citywire, she has a background in writing content for retail financial advisors and has covered a wide range of subjects in finance. Revesz studied journalism at PMA Media, which has since merged with the Press Association. She also holds a B.A. in modern languages from Durham University, as well as CF1 and CF2 financial planning certificates from the CII.