ETPs welcomed the largest inflows on record
Global flows into exchange-traded products (ETPs) broke all-time highs in November as $125.6bn was added across all asset classes, a figure 20% higher than the previous record set in January 2018.
The latest figures from iShares reveal that a “clear risk-on shift” last month led to the record figure as equity ETPs drew $111bn, which accounts for 32% of year-to-date flows into the asset class.
Vaccine developments and a more certain US election result encouraged investors into stocks with a near fivefold increase on October figures, the majority of which landed in US equities, which welcomed $65.2bn of inflows, also an all-time record.
Despite this, US equities only accounted for 10% of EMEA-listed equity inflows, compared to 59% globally, as European investors continue to invest in their own equities ($2.9bn) and emerging markets, which set a new record with $3.8bn positive flows over November.
Equities across the board welcomed the positive sentiment, with technology ($6.3bn) and value ($3.9bn) both setting records, while industrials ($2.9bn) and financials ($4.4bn) reached their highest peaks since 2016.
Fixed income also benefitted from the change in tack over the penultimate month of the year and high yield ETPs reversed consecutive months of outflows to record $5.8bn of buying, joined by investment grade and emerging market debt, which received $4.4bn and $3.7bn net inflows respectively.
While the headline level of global flows into ETPs grew 2.6x against October, money did flow out of some products, with traditional safe havens the biggest losers. Both rates and gold saw heavy outflows, with $7.4bn and $6.8bn leaving the asset classes respectively, the highest figures in over five years for each.
Gold was not the only commodity to suffer, and silver nearly wiped out its October gains of $0.4bn as investors withdrew $0.3bn from the metal, but both are still on track for record years with $47.1bn and $4.8bn of respective inflows year to date.
The final records for November 2020 were set by sustainable ETPs, which has now seen greater inflows over the first 11 months of this year than in all previous years combined. The US and EMEA-listed sustainable products have reached $70bn inflows year-to-date, far greater than last year’s total $24bn and outstripping all years from 2012-19.