BlackRock Global ETP Flows January 2025

BlackRock Global ETP Flows : $146.5B was added to global ETPs in January, moderating from $205.9B in December.

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BlackRock Global ETP Flows January 2025

Karim Chedid, head of investment strategy for iShares EMEA at BlackRock

Commenting on the report, Karim Chedid, head of investment strategy for iShares EMEA at BlackRock said: “January saw a broadening out of equity ETP flows as European equity turned positive, with $3.7 billion of inflows. This was mainly driven by domestic European equities, supported by discounted valuations. US equities still took in $59.3 billion, marked by a shift into precision allocations, with notable interest in S&P equal weight exposures. Tech ETPs attracted significant interest, with investors buying on dip following AI headline-related volatility in the last week of January.”

• Flows moderate: $146.5B was added to global ETPs in January, moderating from $205.9B in December, as equity buying dropped from an elevated $173.1B in December to $88.7B in January.
• Fixed income in focus: fixed income (FI) flows rose to $48.3B, and commodity flows flipped positive for the first month in three, with $1.6B added.
• EMEA-listed buying: January marked the second-highest inflow month for EMEA-listed ETPs on record, with buying of $32.6B – just marginally below the record $33.5B added in December.

A normalising flow backdrop

While the headline focus in equities was the drop in buying of US exposures ($59.3B), this should be taken in context. November ($151.6B) and December ($138.4B) were the two highest inflow months for US equity ETPs on record, and January still ranks as the 15th highest monthly level.

Beyond the US, European equity flows turned positive in January, with $3.7B of inflows – the highest level since February 2023. January flows went entirely into EMEA-listed ETPs – in contrast to February 2023, when buying was fairly evenly split between US and EMEA listing regions. US-listed European equity flows were flat on the month, bucking a six month outflow trend – the exposure was out $0.3B as late as 23 January, pointing to late January buying.

Japanese equities ($0.9B) also bucked a two-month outflow trend, while emerging market (EM) equity remained popular with $6.0B of inflows. Indian equity ETPs (-$1.0B) saw their second-largest outflow month on record – the third consecutive month of selling.

Rate that

Rates ($16.1B) returned as the most popular FI exposure in January for the first time since August 2024. Investment grade (IG) credit flows also picked up, with $8.5B added – almost 2x the $4.6B of inflows in December. High yield (HY) flows ($1.2B) flipped back into positive territory, while EM debt ($1.0B) notched up a second consecutive month of inflows for the first time since June-July 2024.

In contrast to December’s meagre US Treasury (UST) flows ($0.7B), January’s $13.3B of inflows accounted for 83% of rates buying. Eurozone rates ($1.6B) also picked up. Buying of gilts ($0.2B) fell to the lowest level since August 2024.

There was a slight shift in the drivers of UST inflows from December to January. In December, short-duration USTs ($9.3B) exclusively drove inflows, offset by $7.0B out of long duration peers. While short-duration US rates flows remained positive in January, they were at a lower $4.6B, supported by flows across the duration spectrum – including the first inflow month in three for long-duration ETPs ($3.9B).

Buying precision on dip

Despite AI headline-related tech volatility in the last week of January, we saw investors buying on dip: $5.6B was added to US tech exposures in the week beginning 26 January alone – more than half of the $9.9B added to tech ETPs globally across the month. In line with the trend for much of 2024, tech was the most popular sector in January, supported by buying of financials ($3.5B), utilities ($0.5B) and industrials ($0.3B). Energy (-$2.6B) and healthcare (-$0.5B) continued their outflow trend, while materials (-$1.6B) saw the largest outflow month since July 2021.

Delving deeper, the split in cyclical flows in favour of financials and industrials is interesting: while energy outflows are not unusual, the simultaneous outflows from materials points to a cyclical bias eroding. The materials sector also didn’t see sustained or outsized inflows following November’s US election – after a flat Q1 and Q2 2024, and outflows in Q3, materials ended Q4 just slightly positive ($0.3B), as investors once again looked instead to industrials ($6.3B in Q4) and financials ($11.0B in Q4).

On the factor front, value remained popular in January, with a further $1.2B of inflows, while momentum flows picked up to $2.2B. Quality (-$0.3B) registered outflows for the first time since July 2023, while minimum volatility factor outflows tempered to -$0.3B.

Source: ETFWorld.co.uk