- ETF industry continued to accumulate assets in February
- Global exchange traded products, which include both ETFs and exchange traded notes, gathered $9.4 billion
- Garnering investors’ attention over February, ETFs that track gold price movements saw a new monthly flow record of $7.2 billion
The exchange traded fund industry continued to accumulate assets in February on safe-haven demand for gold and U.S. Treasuries as investors remained wary of global growth and declining oil prices.
Global exchange traded products, which include both ETFs and exchange traded notes, gathered $9.4 billion in February and attracted $24.3 billion year-to-date, according to BlackRock data. The global ETP industry now makes up $2.834 trillion in assets under management.
Garnering investors’ attention over February, ETFs that track gold price movements saw a new monthly flow record of $7.2 billion, surpassing the previous high in 2009. The ongoing negative rates in Japan and Europe, along with global growth problems, triggered a surge in bullion interest and drove gold prices above $1,200 per ounce, or 17% higher this year. The SPDR Gold Shares (NYSEArca: GLD) was the most popular ETF of February, bringing in $3.97 billion in net inflows, according to ETF.com.
Also looking at commodities, crude oil products gathered $1.2 billion as prices experienced another volatile month and investors tried to time the market bottom.
Global commodities-related ETPs saw $11.4 billion in net inflows last month.
The growth concerns and spike in market volatility diminished the outlook for further Federal Reserve rate hikes, adding to demand for fixed-income assets. Moreover, the sudden spike in risk helped push investors into safe-haven U.S. Treasury ETFs, which saw assets surge $4.7 billion in February. For instance, the iShares 3-7 Year Treasury Bond ETF (NYSEArca: IEI) added $1.06 billion in inflows and the iShares 20+ Year Treasury Bond ETF (NYSEArca: TLT) brought in $854.9 million.
Toward the end of the month as volatility subsided, investors grew more risk tolerant, funneling $2.5 billion into investment-grade corporate bond ETFs and $1.6 billion into high-yield bond ETFs. Broader fixed-income ETFs also saw $1.4 billion in inflows. In February, the iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG) attracted $1.2 billion and iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEArca: LQD) saw $1.1 billion in inflows.
Global fixed-income ETPs brought in $28.3 billion in February.
During the bout of market volatility, U.S. equity ETPs shed $8.8 billion in assets, with large-caps losing $5.3 billion amid weak earnings growth and a pessimistic outlook. Among the market sectors, health care ETFs shrunk the most, losing $3.0 billion, followed by financials and technology with $1 billion in outflows.
On the other hand, defensive equity plays like utilities gathered $2.4 billion in net inflows and low-volatility ETF strategies gathered a monthly flow record of $3.9 billion. The iShares MSCI USA Minimum Volatility ETF (NYSEArca: USMV) experienced $1.79 billion in net inflows for February.
Additionally, inverse equity ETPs, which capitalize off falling prices, also added $1.8 billion in net inflows.
Global stock-related ETPs lost $15.4 billion.