Global ETP flows “moderate” in July, bond buying up

Flows into global Exchange Traded Products (ETP) in July touched $88.1 billion, down from $99.8 billion in June, revealed research from iShares by BlackRock on global ETP flows in July 2023. The “moderate” global ETP flows were mainly due to a slight drop off in equity buying, the researchers estimated.

Despite equity flows falling from $76.9 billion in June to $59.7 billion in July, it was the asset class’s second-highest inflow month this year. US equity flows drove most of the buying while emerging market (EM) equity flows stayed “relatively stable”. Japanese equity buying fell from $7.8 billion in June to $2.6 billion in July. 

Reflecting a “shift in sector positioning”, European equities saw outflows from European financials in July worth $0.3 billion. European tech and healthcare lost $0.2 billion and $0.1 billion, respectively, while European materials enjoyed inflows worth $0.1 billion in July.

Fixed income buying rose slightly to $30.9 billion, the report stated. Both investment grade and high yield ETPs gained for the second consecutive month in July, the first time since October-November last year. US allocations were slightly down month-on-month, meaning EMEA-listed ETPs accounted for more high-yield flows in July than in June.

Indian equity ETPs recorded the second-highest gains with $1.5 billion of inflows in July. This mainly came from international investors, with $1.2 billion into US-listed Indian equity ETPs. Flows into EMEA-listed India ETPs have taken year-to-date net inflows to $0.7 billion. 

The $11.1 billion added to emerging market equity ETPs was “heavily tilted” towards Asia/Pacific-listed inflows. Single-country exposures dominated allocations to US-listed EM equity ETPs, whereas broad EM equity buying ruled EMEA-listed flows. 

According to BlackRock, flows into sector ETPs broadly rose in July, with tech leading the way with $5.0 billion in inflows. Investment across all cyclical sectors, with energy, financials, industrials and materials, registered an increase in monthly allocations. Energy enjoyed its first monthly inflows since November 2022.

© 2023 funds europe

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