Investors are getting more comfortable with exchange traded funds as global assets continued to gather at a record setting pace over November, led by fixed-income interest.
“November’s strong flows demonstrate that investors are attracted to the flexibility ETPs provide to navigate today’s markets,” Dodd Kittsley, Global Head of ETP Research at BlackRock, said in a research note. “Against a backdrop of the U.S. elections and the looming fiscal cliff, investors looked to ETPs for safe-haven exposure in Treasuries, while also moving into US Equities, EM Equities and EM Bonds for higher income exposures.”
In November, global ETPs added $25.0 billion in assets, compared to $11.0 billion in October, with the overall industry adding $218.9 billion year-to-date, the strongest on record. There were 4,747 total ETPs on the global market as of the end of November. [ETF Performance Report: November]
Fixed-income products led the pack as the investment category saw $67.8 billion, or 31% of the total, in flows through November, compared to $50 billion for all of 2011. Top fixed-income areas include Treasuries attracted $2.7 billion – over $1.6 billion came in over a three day period ahead of the elections, emerging market bonds added $1.1 billion and investment grade corporate bonds garnered $1.0 billion.
On the other hand, high-yield fixed-income ETPs lost $40 million. Although, some high-yield assets, such as bank loans, short-duration high yield and emerging market bond ETPs, saw inflows.
On the equities side, emerging market equities saw $5.1 billion, led by $2.2 billion in China exposure. Developed market equities experienced $11.6 billion in net inflows, led by U.S. mid-caps with $4.1 billion. U.S. equities gathered $8.2 billion.