Net new assets for Q1 totalling US$67.2bn points to one of the best ever starts to the year for exchange traded products (ETPs).
This latest report from BlackRock confirms that investors have continued to return to the market choosing ETPs as the preferred vehicle to invest in a range of asset classes. The new high of net new assets represents an increase of 50% on Q4 2011 net new assets.
BlackRock further confirms that investor interest in fixed income ETPs also hit a new high during the first quarter of this year. Fixed income products attracted inflows of $19.5bn, well over the previous quarter’s record of $14.7bn, and accounted for 29% of all inflows into ETPs globally.
Within the asset class, says BlackRock, investors have showed a clear preference for investment grade and high yield corporate bonds, with these two categories accounting for 85%, or $16.5bn of total fixed income inflows.
Jennifer Grancio, Managing Director at BlackRock, comments, “Better than expected economic figures enticed investors back into the market and encouraged them to consider risk assets, and the data demonstrates that those investors are increasingly choosing ETPs to access new opportunities and express their views. However, despite improvements in the global economic outlook, there is still a degree of volatility and uncertainty around issues such as the Eurozone and oil prices, which will continue to colour investor sentiment in the months to come."
Grancio says that on looking at other asset classes, emerging markets equity products look interesting as they attracted net new assets of $13.7bn for the quarter, but she also warns that flows varied widely on a month-by-month basis.
BlackRock’s report notes that emerging market ETPs lost momentum during March with outflows of $1bn, in contrast to the significant inflows of $14.6bn posted during January and February.
The majority of outflows came from single country ETPs, such as those offering access to individual countries including Taiwan, China, Brazil, Mexico and South Korea. ETPs offering broad emerging markets equity exposure attracted modest inflows of $1.3bn in March.
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