US and Indian equities exchange-traded products (ETPs) saw strong inflows in July, according to BlackRock’s latest Global ETP Flows report.
BlackRock said that despite a drop from June levels, July still represented the second-highest inflow month this year for equities ETPs, against a backdrop of reduced allocations so far in 2023 as a whole.
US equities ETPs drove most of the buying with $38.6bn (£30bn) while emerging markets flows stayed relatively stable at $11.1bn (£8bn), and Japanese equities buying fell sharply from $7.8bn (£6bn) to $2.6bn (£2bn).
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BlackRock noted that international investors started to meaningfully sell European equity ETPs over the summer. The asset class saw a fourth consecutive month of outflows, but the pace of selling slowed month on month.
Indian equities ETPs booked $1.5bn (£1.1bn) of inflows in July, the second highest for the asset class on record.
In contrast to a record in March 2023, the inflows in July came largely from international investors, with $1.2bn (0.9bn) into US-listed Indian equity ETPs. Flows into EMEA-listed India ETPs have been positive for nine consecutive months, with a further $0.2bn (£0.14bn) added in July.
In fixed income, simultaneous inflows into investment grade, with $5.1bn (£4bn) and high yield with $2.2bn (£1.7bn) continued for a second consecutive month in July. This was the first time this has happened since October-November 2022.
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Laura Cooper, senior macro investment strategist for iShares EMEA at BlackRock commented: “Positive investor sentiment carried through into July with global equity ETP buying reaching the second-highest inflow month this year, led by US equities.
“This also accompanied the second-highest inflow month on record into Indian equity ETPs, as investors build up strategic exposures to capture favourable long-term growth and demographic dynamics. Flows into fixed income built upon gains seen in June, with inflows spread across investment grade and high yield credit.”
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