Bumper flows helps ETP industry set new record

Concerns over Europe and the extended period of ultra-low interest rates have fuelled the global exchange traded products industry, pushing inflows to $34.1 billion (£21.6 billion).

According to data from BlackRock, January flows have historically been low, and at times even slipped into negative territory, in the wake of cyclically higher December demand.

However, January 2012 bucked this trend, gathering the highest level of new assets since September 2010. BlackRock said the last time January’s inflows eclipsed December’s was in 1994.

Compared with January 2011, inflows were up 144% even though last January had been the best on record with inflows of $13.9 billion.

In terms of the most popular asset classes, equity and fixed income products took the lead, BlackRock said.

Equity ETP inflows reached $22.6 billion, marking a level last hit in October 2011. Fixed income ETPs, meanwhile, set a new global record, gathering $9.1 billion, beating its previous record for monthly fixed income inflows of $6.73 billion in January 2009.

In terms of regions, North America equity ETPs gathered $14.6 billion, reflecting an increase in risk appetite and renewed confidence in the low, but steady, US economic growth. Within this, large-cap equity products led the charge, with $5.9 billion of new money in January 2012.

Conversely, investors around the world were net sellers of ETPs providing exposure to European equities, which saw outflows of $106.5 million in January this year, compared with $2.1 billion of inflows in January 2011.