Net flows into global exchange-traded product (ETP) net flows plunged in February, but they rallied in Canada, BlackRock reports.
Global ETP flows dropped to US$10.6 billion in the month, down from US$37.0 billion in January. However, in Canada, there were US$0.9 billion in positive net flows in February, up from US$0.5 billion in negative net flows in the previous month.
Net flows into products that invest in Canadian equity also turned around, generating US$44 million in positive net flows in February, up from US$633 million in negative net flows in January.
On the global level, equities continued to rally, as BlackRock reports continued buying in February brought year-to-date equity ETP flows to US$47.1 billion.
Investors continued to curb their risk aversion, particularly to developed markets, it says. “The S&P 500 index came close to levels last seen in 2007, even as the U.S. sequester budget negotiations wore on, and some concerns persisted over the durability of the U.S. Federal Reserve’s asset purchase program,” it notes, adding that developed market equity ETPs attracted US$13.0 billion in net flows.
Emerging market equity inflows slowed compared to January, it notes, and high yield fixed income funds experienced outflows as modest yield compression continued. Yet, equity income remains in demand, it says, with dividend focused, real estate, and preferred stock ETPs all gathering new assets.
On the fixed-income side, BlackRock says that, “Investors continued to move toward the short end of the yield curve.” Short-term funds had positive net inflows, while all other maturities saw collective outflows.
BlackRock says that with rising equities, a stronger U.D. dollar, and continued low Treasury yields, the investment appetite for gold has waned.