ETFs and similar products started 2017 with their strongest inflows since September 2008.
Flows for January were $61.2 billion (€57.1 billion), according to BlackRock analysis. This compares to $64.7 billion in September 2008.
US and Japanese equity funds gained the most new money due to US-led global reflationary trends, said BlackRock, which owns the iShares ETF brand.
Exchange-traded products (ETPs), which include ETFs, in Europe gained $10.2 billion – their largest monthly inflows since August 2015.
Patrick Mattar, of iShares capital markets team, says: “For the fourth month in a row flows into European-domiciled equities funds surpassed fixed income, as investors respond to higher interest rates, reflation prospects and broadening of the global macroeconomic recovery.”
He says that investors have been buying equities in both Europe and the US, reflecting a renewed appetite for risk. European flows are benefiting from a “better earnings picture and stronger macro data in the region”.
But he also notes gold and emerging market flow data that suggests European investors have lower risk appetite than global peers.
European investors bought gold funds, but global investors sold them in response to the rising rate regime in the US, suggesting European investors are currently more focused on portfolio diversification.
European investors have also been buying emerging market debt and selling emerging market equities while investors elsewhere were more focused on equities, Mattar says in the latest ‘BlackRock ETP Landscape Report’.
“Historically, EM assets have performed strongly in an environment where [the US dollar] is weakening and this has tended to be an indicator of flows into EM ETFs. Despite the favourable environment the current dynamic would suggest that European investors are more risk averse than global peers at present.”
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