While the exchange traded fund space continues to grow, things are beginning to slow down, with inflows trickling in to a 16-month low in April after the heavy investment interest at the start of the year.
“April was a weaker month for ETPs than March, but it continues to be a record year for the popularity of ETPs overall,” head of ETP research at BlackRock, Ursula Marchioni, said in a CNBC article. “More money has been put into ETPs so far this year than at the same stage at any other year in the industry’s history.”
Global exchange traded products brought in $6.5 billion in April, levels not seen since January 2014. In contrast, ETPs attracted $35.8 billion and $49.2 billion in flows over March and February, respectively.
After the run up in the equities market, stock funds experienced $15.5 billion in outflows over April.
Emerging market equity ETP inflows, though, picked up, attracting $2.5 billion of inflows in April – the “first notable inflows since August 2014,” according to BlackRock.
Meanwhile, fixed-income fund flows improved last month, following the Federal Reserves’ minutes, with investors growing wary of the “stretched valuations” in stocks.
The Federal Open Meeting Committee revealed that at its March meeting, the central bank dropped its pledge to be “patient” before a rate hike but also diminished its projected path for an interest rate increase while growth and inflation remain depressed.
Despite the weak ETF flows last month, assets in U.S.-listed exchange traded products hit a new record of $2.132 trillion at the end of April, according to ETFGI data. Moreover, assets in Europe-listed ETPs broke through the $500 billion milestone and ended $511 billion at the end of the month.
Meanwhile, global ETP assets also fell short of breaking through the $3 trillion milestone, ending the month at $2.998 trillion.
“Some 60 percent of the market’s growth in 2015 is down to European-domiciled funds,” Marchioni added. “It’s a great vote of confidence for the region in a month we celebrated its 15 year anniversary.”
For more information on the ETF industry, visit our ETF performance reports category.
Max Chen contributed to this article.
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