ETFs See Best Two-Month Start Ever

March 4th at 3:03pm by Tom Lydon

Despite slowing the asset inflows over February, especially in the last weeks on the heels of rising volatility, global equity exchange traded funds recorded their strongest two-month start ever to a new year.

Globally, developed market equity exchange traded products, which included both ETFs and exchange traded notes, saw $13 billion in new inflows, including a $7.3 billion in non-U.S. exposure, according to a BlackRock report. [Here are the Most-Searched ETFs]

Sector funds gathered $4.7 billion, with real estate leading at $1.5 billion as economic indicators pointed to a rebounding U.S. housing market. Emerging market equity ETP inflows slowed. Additionally, Dividend-focused ETPs added $1.6 billion. [ETF Performance Report: February]

Minimum- or low-volatility ETFs also saw heavier inflows, attracting an average $926 million for the firs two months, or double the monthly flows over 2012.

Investors are also taking a more cautious approach to interest rate risk, moving to the short-term fixed-income yield curve. Short-term debt ETPs saw $4 billion in new inflows while other maturities experienced outflows of $1.3 billion.

Gold ETPs continued to lose strength as investors pulled $5.6 billion out of the precious metal.

Overall, global ETFs’ February net inflows totaled $10.6 billion after taking in $37 billion in January. There were 4,798 ETPs on the global market, with $2.04 billion in assets under management, at the end of the month.

“While ETP flows moderated in February, continued demand for Equity ETPs pushed YTD flows to $47.1bn, the strongest Jan-Feb total on record,” according to Dodd Kittsley, Global Head of ETP Research at BlackRock. “Investors also exhibited patterns of duration rotation, moving towards the short end of the yield curve, where inflows totaled $4.0bn for the month.”

Year-to-date, top global ETFs by asset inflows include:

  • WisdomTreet Japan Hedged Equity Fund (NYSEArca: DXJ): $2.8 billion
  • iShares MSCI Emerging Markets (NYSEArca: EEM): $2.8 billion
  • ChinaAMC CSI 300 Index ETF: $2.6 billion

Global ETFs with the largest outflows year-to-date include:

  • SPDR S&P 500 (NYSEArca: SPY): $5.9 billion
  • SPDR Gold (NYSEArca: GLD): $5.0 billion
  • iShares S&P/TSX 60 Index Fund: $1.5 billion

For more information on ETF asset flows, visit our ETF performance reports category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.