ETP investors flock to commodities as European equities suffer $6.5bn outflow in March

clock • 1 min read
ETP investors flock to commodities as European equities suffer $6.5bn outflow in March

European equity exchange-traded products (ETPs) suffered outflows of $6.5bn in March, the first month of outflows since October 2020, according to a recent Global ETP Flows report from BlackRock, as Russia's invasion of Ukraine continues to shake up markets across the region.

EMEA-listed European equity ETPs were impacted worst, as investors sold $5.5bn, while outflows from US-domiciled European equity products totalled $1.2bn.

Fixed income funds were less affected, according to BlackRock. European investment grade credit funds gained $0.9bn following February outflows of $1.2bn.

Inflows into European government bond funds decreased in March, from $1.3bn to $0.3bn, while flows into inflation-protected products climbed to their highest monthly allocation figure on record, up at $0.5bn.

Investors flocked to commodities over the period, as buying across the asset class rose to its highest level since April 2020, with $12.8bn of inflows.

Meanwhile, Gold had a record month.

"March saw record inflows of $11.3bn into gold ETPs - a fivefold increase on February's levels, trouncing the previous high of $9.4bn set in July 2020," the report said.

"This has come amid increased safe-haven moves in the market, but the propensity to buy gold has been building - we have seen a persistent flow trend emerge, with three consecutive inflow months for the first time since August-October 2020. Gold buying was spread across listing regions, in line with the trend year-to-date."

Investors also continued to allocate to energy, while flows out of financials climbed to $7bn.

Flows into sustainability ETPs dropped to their lowest levels since August 2020 over the month, totalling $5.6bn.

$1bn went into clean energy products, while ESG best-in-class, the traditional leader in the space, was the third most popular with investors, as equity BiC ETPs saw outflows of $0.8bn, the first month of outflows since March 2019.