Flows into global exchange traded products fell 38% in November, weighed on by falling US equity allocations, but healthcare was a bright spot.
Month-on-month, flows into ETPs dropped to $74.8bn in November, down from $121bn in October, according to figures from BlackRock.
Equity flows led the decline, halving from $84.9bn in October to $43.2bn in November.
The drop off in headline equity flows was due to US equity allocations falling month-on-month. Inflows dropped to $21.4bn from $57.5bn in October.
In terms of sectors, flows tilted slightly more defensive in November. Financials, energy and industrials saw outflows in the last week of the month, which turned financials' flows negative (-$0.4bn).
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Healthcare led inflows, with $3.1bn added in November, followed by tech with $2.2bn. Energy notched up a second consecutive month of inflows with $1.0bn added.
European equity ETPs endured another difficult month.
With outflows of $1.7bn, the largest since August, European equity net flows continued to be negative.
Outflows now stand at $16.5bn for the year to date, including a cumulative $27bn out since March. This is versus a net selling of $27.2bn over 2021.
Investors have been turning away from European equities more broadly but November's outflows were primarily out of large caps, while midcaps took in $300m, according to the BlackRock data.
However there was good news for emerging market equity allocations. They increased to $11.7bn during the month, the highest monthly inflow since April.
Fixed income flows remained relatively steady at $33.7bn for November.
Fixed income flows into credit ($17.1bn) outpaced rates ETPs ($11.9bn) for the first time this year.
High yield, which was on track for a record outflow year with a cumulative outflow of $21bn as recently as 21 September, is now only down $5bn for the year.
In November, high yield inflows continued with $7bn added, slightly down from the $7.8bn added in October.
Meanwhile, investment grade flows have risen to $36bn for the year, from $23bn as of 21 September. They rose from $3.4bn in October to $10.1bn in November.
In European credit, the conviction continues to lie with investment grade over high yield, with $3bn into the former in November, up from $2.5bn in October, and $300m into the latter.
For US credit, high yield accounted for a larger slice of the pie, with $6.7bn of inflows in November compared to $7.2bn into investment grade.
In factors, value notched up a second consecutive month of inflows in November ($1.5bn), following on from the $0.6bn added in October after four consecutive months of outflows from June to September.
Quality remains the most popular factor year to date, with a further $1.7bn added in November, while minimum volatility flows slowed to $0.5bn.
Sustainable inflows picked up in November, with $7.3bn added across US and European-listed ETPs.
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Europe increased its sustainable flows from $4.2bn in October to $6.5bn in November, while the US reversed the previous month's net outflows to post $739m of inflows.
Within Europe, fixed income accounted for the majority of sustainable flows. The $3.7bn added in November marked the highest monthly inflows for the asset class this year, outpacing July's $3.6bn.
Fixed income sustainable flows were mainly driven by ESG best-in-class strategies ($3.4bn), split across eurozone, US and global exposures.
Sustainable equity flows in Europe matched 2022's monthly average, at $2.8bn, and were also largely driven by best-in-class strategies ($1.5bn), led by US and global exposures.
In the US, sustainable inflows were dominated by equities ($663m), led by ESG optimised ($219m) and climate-exclusive strategies ($206m). Fixed income saw $76m of net inflows, reversing October's outflows (-$16m), but still down vs. 2022's monthly average of $145m.
