BlackRock ETP 2015 outlook

Emerging markets, Japanese equity and smart beta exchange-traded products are geared to carry strong 2014 performances into the New Year, according to BlackRock.

BlackRock ETP 2015 outlook

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The firm highlighted Chinese and Indian ETPs as promising for 2015, due to market valuations, supportive government policies and reduced susceptibility to foreign capital outflow stemming from rising interest rates.

Japanese equity is also on BlackRock’s radar as the effects of ‘Abenomics’ are felt throughout the economy.

While flows into smart beta experienced a 21% drop on the 2013 figures to $51.1bn (£32.5bn), BlackRock also tipped the sector as one to watch over the next 12 months, with volatility expected to normalise in 2015.

Record flows of $267.9bn (£170.4bn) up to November meant that assets under management (AUM) in the global ETP marketplace jumped by 15% on the January figure to more than $2.7tn (£1.7tn).

Fixed income ETPs reaped the benefit of global economic growth falling short of the forecasted rate as flows to November totalled $78.6bn (£50bn), driving AUM up by 22% to $430bn (£273.5bn).

European ETP flows in 2014 tripled last year’s figures, accumulating $60.8bn in the same time-frame, with an increase in European Central Bank bond purchases making a significant contribution.

Ongoing economic growth boosted US-listed ETP flows to an unprecedented $193.5bn (£123.1bn), with the vast majority in fixed income, though equity more than doubled the 2013 total, gathering $19.2bn (£12.2bn) versus (£5bn) last year.

Emerging market equities reversed from outflows of $10.3bn (£6.5bn) in 2013 to gather $4.3bn (£2.7bn) to November this year.

Ursula Marchioni, BlackRock’s head of ETP research for EMEA, said: “The global ETP industry continues to grow at a double digit pace as ETPs attract a broader base of global investors than ever before. ETPs are being used by capital market participants looking for deep liquidity, by investors seeking precision exposures and by a growing segment of the market using ETFs as buy and hold investment vehicles at the heart of their portfolios.”
 

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