BlackRock’s Global ETP Flows report found Q1 ETP net inflows totalled $148.5bn as sectors across the board recorded strong increases.
Fixed income flows reached $38bn last month, their highest level since October, while equity flows jumped to $24.3b more than doubling the $9.4bn raised in February.
In fixed income, defensive positions provided the biggest boost for the sector, with rates ETPs recording their best month on record as $33.2bn flowed into the asset class.
Within these, $28.6bn went to US Treasury exposure, while $3.4bn flowed to European rates exposures, including $300m into UK gilt exposure. Among European rates, more than $2bn was allocated to exposures with up to five years of duration.
Investment grade flows turned positive at $400m, while high yield continued to see outflow, although these tempered to $1.3bn.
BlackRock also noted that within EMEA-listed ETPs, a divergence between euro credit and USD credit continued.
Equities
The bounce in equity inflows came from across regions, as US equity flows reached positive territory for the first time since December ($6.3bn).
Global emerging market equity flows also increased, to $6.6bn, driven largely by single country buying ($5bn) as investors bought APAC-listed China and India ETPs.
However, European equity inflows fell, reaching their lowest in three months at $1.6bn.
By sectors, tech recorded the strongest performance ($3.2bn), of which $2bn flowed into US tech, which enjoyed its best month since October 2022.
Healthcare flows saw their fourth consecutive negative month, with $200m outflows, although BlackRock noted this was “skewed by outflows from US healthcare exposures”.
Energy also recorded a fourth consecutive month of outflows, losing net $1.8bn, while financials achieved its second consecutive month of inflows at $1.6bn.
Financials continued to see inflows, up $1.6bn, while energy remained unpopular in March, with $1.8bn of outflows in its fourth consecutive month of selling.
Gold ETPs recorded their largest inflows since April 2022, with $1.7bn entering the products, a welcome return for the sector following a cumulative net $25.5bn outflow since that previous high.
Sustainable flows
Sustainable flows fell into negative territory in March, losing $3.7bn in outflows, despite strong performance in recent months.
EMEA-listed ETPs saw flows fall to $1.9bn in March from $4.1bn in February, with equity ETPs composing the majority of inflows ($1.5bn).
Flows into EMEA-listed ETPs decreased from $4.1bn in February to $1.9bn in March, while in EMEA, equity ETPs accounted for the majority of inflows ($1.5bn).
Sustainable fixed income flows in EMEA totalled just $392m, compared to a 12-month average of $1.7bn, and saw the majority of its flows go to eurozone climate strategies ($180m).
US-listed sustainable ETPs recorded sizeable net outflows, losing $5.6bn, with equity exposures composing all of the loss ($1.7bn).
Karim Chedid, EMEA head of iShares investment strategy at BlackRock, said: “While flows to ETPs increase across the board in March, there was a clear defensive shift in sector and commodity flows, including gold.
“March recorded the highest month for rates on record, as fixed income flows rose to $38bn. In EMEA listed ETPs, the divergence between euro credit and USD credit continued, with investors continuing to favour the former.”
