Global ETP flows registered $55.2bn in July, the highest amount seen in 2016. Of this, US equity inflows accounted for $32bn. Blackrock said this was helped by continued strength in dividend-weighted and minimum volatility strategies with inflows of $4.8bn and $1.4bn, respectively.
The flows were supported by “relatively resilient markets” and lower-than-expected signs of stress in the immediate aftermaths of the Brexit vote, BlackRock noted.
Fixed income flows also accelerated to $13.9bn, driven by investment grade and high yield corporate bonds with $7bn combined.
The largest flow volumes in July were into emerging market equities ($8.2bn) and emerging market debt ($3.9bn).
Chief strategist for iShares EMEA Ursula Marchioni said: “In July, investors didn't panic or try to de-risk portfolios, but rather capitalised on some buying opportunities and continued to search for yield in a low return environment which is even more likely to continue. “In a record month for global ETPs, US equities and emerging market debt and equity were the flavours of the month. There were a number of records and milestones across different asset classes during the month, with minimum volatility funds surpassing $50bn in assets and broad emerging market equity as well as emerging market debt funds both reaching new monthly highs.”
“Emerging markets were the standout for the month, with $11.2bn of flows into debt and equities products,” Marchioni continued. “Although counter-intuitive, emerging markets seem to have earned a safe haven status due to the perceived distance from volatility driven by developed markets, combined with a view that market conditions will unlikely bring Fed tightening and a strong Dollar anytime soon.”