Exchange-traded products (ETP) look set to tear through the US$3 trillion mark this month as flows continue to track on-trend growth rates, according to the latest BlackRock report on the sector.
The November BlackRock ‘Global ETP Landscape’ report records total assets under management in the fast-growing listed passive product space at just US$20 billion shy of the triple trillion.
Over November this year more than US$28 billion flowed into ETPs globally, down from US$44.5 billion in the same month in 2014. Monthly ETP flows ranged from US$8.5 billion to US$49.1 billion over 2015, the BlackRock report shows.
Despite the year-on-year flow slowdown in November, the ETP market should still beat the annual inflow high point set last year, according to BlackRock.
“The industry remains on record pace with $302.4bn in flows year-to-date compared with $283.9bn for year-to-date 2014,” the ETP Landscape report says.
During November US equity markets were the top destination for ETP investors, picking up US$21.4 billion, or about 75 per cent, of total flows. The move represented a sharp turnaround for US equity ETPs compared to the first half of 2015 when the sector had seen net outflows. Only emerging market equities ETPs remain in negative territory for the year, shedding US$27.3 billion in assets over the period.
Over the year to November, fixed income was the most popular ETP asset class with inflows of US$90 billion, followed by: European equities (US$73.7 billion); other developed market equities (US$61.7 billion); US equities (US$46.7 billion); Japanese equities (US$45.9 billion); and, commodities/other (US$11.7 billion).
However, investor support for fixed income ETPs waned in November, the BlackRock study shows.
“Fixed income funds had outflows in November after a strong
October,” the report says. “US Treasury funds shed ($4.5bn) as anticipation of a December rate hike increased. Sovereign debt funds also saw outflows of ($1.8bn) primarily from funds exposed to broad European and German government bonds.”
Despite giving up 0.1 per cent market share over the year to date, the BlackRock-owned firm, iShares, retained its top spot on the ETP ladder with funds under management of over US$1.1 trillion, more than double its nearest rival, Vanguard, which grew its share of the market by 1.1 per cent over the period.
The erstwhile second-ranked ETP provider, State Street, faded further over 2015, losing 2.3 per cent market share representing net outflows of US$28 billion in the year-to-date. However, with more than US$445 billion under management, State Street, remains well above fourth-placed Invesco Powershares, which reported about US$103 billion in assets in November.