Exchange traded products listed around the globe experienced record outflows in August as investors fretted over Federal Reserve tapering and weakness in stock markets.
The global ETP industry saw outflows of $15 billion in August, the second month of redemptions this year, according to data from BlackRock, which manages the iShares ETFs.
“This is the largest monthly outflow on record for global ETPs in terms of gross assets, however the outflow represents only 0.7% of global ETP assets,” the firm said. “The previous monthly record for global ETP outflows was in January 2010, when the industry witnessed outflows of $13.4 billion, representing an outflow of 1.2% of total assets at the time.”
“Investors remained cautious in August due to continued uncertainty about U.S. economic growth and Federal Reserve policy,” said Raj Seshadri, Head of BlackRock ETP Insights. “Continued uncertainty around the timing of the Fed’s tapering, the direction of economic data and potential geopolitical conflict is likely to lead to increased volatility for equity and bond markets in September.”
Global investors pulled $5.3 billion from fixed-income products last month. Equity ETPs saw outflows of $9.4 billion in August, according to BlackRock.
Overall, year-to-date global ETP inflows through August are running behind 2012’s record pace. Investors have added $128.1 billion so far in 2013, compared with $139.9 billion in the year-ago period.
“However, the 2013 composition remains much different with Equity gathering 80% more than last year, Fixed Income just a third as much and Commodity outflows adding a significant drag,” BlackRock said.
Equity funds have gathered $138.5 billion year to date.