January was the largest on record for net flows.
2017 has started strong! Largest January on record for net inflows.
2016 saw $180bn in US equities, half came post the US election
2017 has seen an additional $14billion into US equities, half of which came in the last week of January.
Small/mid caps have been in favour as Trump continues to position US small business owners, as well as strengthening companies who centralise their operations in the US.
In 2016 Japanese ETPs took in $22billion, they have seen a further 11billion YTD.
The BOJ’s QE programme has been the key driver of these flows.
The central bank will only buy Japan-listed ETFs with the assets split almost exactly between TOPIX and Nikkei 225 ETFs and the lion’s share of the flows have gone in this direction. There was some buying in European and US listed products at the outset of the month but this tailed off towards the end.
European equities lost 34billion last year, following the surprise Brexit vote.
This year European equity ETFs have seen $3billion of inflows, as European investors seem to be buying back into European equities.
Towards the end of the month we saw large inflows into US IG Credit and short-dated Treasuries, the majority of these flows have been directed at Aggregate Bond exposures, which has been a long term positive flow trend. Over the 25 months between the start of 2015 and the end of January 2017 there were over $46billion of inflows into these products. Despite the long term trend, the daily flows witnessed have been extremely large with investors moving into the funds at a rate significantly above average.
2017 has seen a continuation of this trend with US IG and Aggregate bond funds seeing the majority of inflows (around $2billion each just last week)
2016 saw almost $20billion into Gold ETPs. The flows have been fairly flat so far in 2017 however BlackRock does see (albiet a smaller size) inflows during market uncertainty and outflows during short term risk-on periods.
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