As investors returned to the equities market, bringing the broader stock markets back to pre-financial crisis levels, global exchange traded products have attracted the highest ever recorded inflows over the first quarter.
ETPs marked an auspicious start to 2012 as fund products brought in $67.3 billion over the first three months, a 57% increase year-over-year for the same period, according to a BlackRock research note. Q1 inflows also outpaced Q4 2011 by 50%. The last time the first quarter gains were high than the fourth quarter was in 1996 – Q1 flows have typically been lower due to cyclically higher flows in Q4. [ETF Performance Report: Best First Quarter in Over a Decade]
Additionally, fixed-income ETPs attracted a record quarterly high of $19.5 billion, accounting for 29% of all Q1 global ETP inflows. Investment grade and high-yield corporate bonds continued to top the list, making up 85% of overall fixed-income inflows.
Emerging market equity ETPs also experienced a record first quarter result, bringing in $13.7 billion. In comparison, the last record was $5 billion in Q1 2006.
As of March 31, there were 4,450 ETPs with $1.728 trillion in assets globally. 229 ETPs were launched so far this year.
“The first quarter of 2012 was very strong for the global ETP industry and global financial markets,” Jennifer Grancio, managing director at BlackRock, said in the note. “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 color investor sentiment in the months to come.”
For the month of March, global inflows into ETPs slowed to $14.7 billion, with fixed-income products accounting for $5.8 billion, emerging market equity ETPs lost $1 billion and alternative products added $1.7 billion.
Back at home, assets in U.S.-listed exchange traded funds and exchange traded notes rose to $1.21 trillion in March, a 12% increase over the same month last year, according to the ETF Industry Association. U.S.-listed ETP net cash inflows hit $13.2 billion for March and a year-to-date net cash inflow of $55.9 billion, a record first quarter for a calendar year.
In March, U.S. equity ETPs brought in $7.5 billion, fixed-income added $4.1 billion and global/international equities attracted $1.6 billion. Meanwhile, currency ETPs lost $484 million and commodities bled $216 million.
As of the end of March, there were 1,446 U.S.-listed ETPs, a 23% jump compared to the same time last year. There were 1234 U.S.-listed ETFs and 212 U.S.-listed ETNs.
For more information on ETF data, visit our ETF performance reports category.
Max Chen contributed to this article.