Global Exchange Traded Products inflows total $12.9bn in March. Emerging markets see inflows on final six days of the month

8th April 2014

Global Exchange Traded Product inflows totalled $12.9bn in March driven by equity funds, which added $15.4bn according the March’s BlackRock ETP landscape report. US equity ETP flows of $15.8bn were steady through mid-month but began to ease once the Fed hinted rising rates may come earlier in 2015 than expected.

Selling pressure eased for emerging markets equity ETPs with redemptions moderating to ($1.8bn) in March and finishing the month with six consecutive days of inflows across both broad-based and single country funds.Japanese and pan-European equity ETPs – strong contributors to flows during the past year – both stalled as further signs of economic improvement remain slow to emerge.

Japanese equity ETP outflows of ($0.7bn) represented the first monthly redemptions in two years. Pan-European equity ETPs broke their own 10-month asset gathering streak, posting outflows of ($0.9bn).

Fixed income ETP outflows were ($3.2bn) for the month. Steady asset gathering for broad/aggregate, investment grade and high yield corporate bond funds was outweighed by US Treasury ETP redemptions of ($9.5bn) that unwound February’s inflows.

US equity ETP flows reached $15.8bn in March but were essentially unchanged after the first week says the report. They moved lower after Janet Yellen’s comments on March 19th suggesting an accelerated time frame for raising interest rates relative to what

had been anticipated by the market. The March inflows were the highest monthly total so far this year, but were lower than the $21.4bn surge during the final three weeks of February.

The report shows that single country EM fund outflows reached ($1.5bn). However, much of this came from funds with exposure to China, as March’s flash PMI indicated contraction for the third month in a row and fell to an eight-month low of 48.1.6. The last week of March brought inflows as investors anticipated the Chinese government may take steps to stimulate the economy.

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