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.
Gold ETPs also pulled in $1.8 billion.
In November, top ETFs by asset inflows include the iShares MSCI Emerging Markets Fund (NYSEArca: EEM), which saw $2.3 billion in inflows, SPDR S&P 500 (NYSEArca: SPY), which added $1.4 billion, and Vanguard Mid-Cap (NYSEArca: VO), which attracted $1.4 billion.
It is also worth mentioning that the PIMCO Total Return ETF (NYSEArca: BOND), which had $3.76 billion in assets under management, is the second largest new ETF, behind the Huatai-Pinebridge CSI 300 ETF, which trades outside the U.S. and had $3.77 billion in assets.
For more information on ETF asset flows, visit our ETF performance reports category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own EEM, SPY and BOND.