ETF flows show investors repositioning post US election

US equity exchange-traded products, including ETFs, saw $52.2 billion (€48.6 billion) in the US equity rally as investors positioned themselves for the Donald Trump presidency, BlackRock reports.

Broad European equity exposures saw inflows of $1.2 billion, with healthcare, financials and oil & gas equities gathering a combined $500 million of inflows, the figures for November showed.

But emerging market equities saw $3.2 billion in outflows, such as China equity which $845 million leave. Emerging market debt saw outflows of $3.5 billion.

Ursula Marchioni, a chief strategist for BlackRock’s iShares, said: “The ETP [exchange-traded product] trends seen in November suggest investors used the products to position their portfolios for the Trump presidency.

“The results triggered inflows into US equity ETFs on expectations of President-elect Trump’s pro-growth policies. The inflows largely went into broad large cap exposures, as well as financials which benefited from yield curve steepening and expectations of lower regulation under Trump’s administration.”

Marchioni added that emerging market debt ETPs, specifically government debt and sovereign bond exposures, saw outflows “driven by Trump’s anti-trade rhetoric” and a stronger US dollar.

Gold saw outflows of $4.5 billion driven by “broadly resilient risk sentiment”.

©2016 funds europe

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