Global ETPs post best Q1 on record

The global ETP Industry recorded its best Q1 on record, amassing flows of $70.1 billion compared to the previous record of $65.5 billion in 2012, finds a BlackRock report.

“The wide variety of unique exposures that ETPs offer, from Japanese equities to short-term fixed income and minimum volatility, has been a crucial factor in the industry’s strong ongoing growth,” says Dodd Kittsley, global head of ETP Research at BlackRock.

Read: ETPs surpass $2 trillion in AUM

Russ Koesterich, BlackRock global chief investment strategist, adds, “Despite continued market volatility, investors recognize the fundamentals in the U.S. are generally favourable, given strong corporate earnings and cheap equity valuations. The first quarter showed investors moving cash from the sidelines into equities, and preparing for a rise in interest rates by rotating within fixed-income into short-term and floating-rate ETFs.”

Read: 12 ETP trends in 2012

Canadian highlights include:

• Within fixed-income, credit exposure was again a major driver of flows; with less money into funds and significant Canadian rates exposure as investors seek to limit interest rate risk;
• Strong flows into international equity funds, particularly U.S. equities;
• Canada also took in almost $100 million year-to-date in U.S. dividend funds.

Read: U.S. veterans launch ETP-focused firm

Global highlights include:

• Equities accounted for $65.1 billion or 93% of flows, with developed markets accounting for $60.5 billion in flows;
• Flows into U.S. equities accounted for $37.3 billion, up 80% compared to Q1 2012;
• Fixed-income inflows remained strong with $11.6 billion, the eighth consecutive quarter with inflows of at least $10 billion;
• Ultra Short-Term, Short-Term and Floating Rate exposures accounted for $9.4 billion, or 81% of fixed-income ETP flows;
• Gold outflows continued to weigh on commodities in March and totaled $9.2 billion for the quarter;
• Minimum Volatility Equity assets grew 76% in Q1 including flows of $4.1 billion.

Staff

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