In 2015, exchange traded products targeting emerging market equities lost $26bn while total ETPs globally set a record high of $351bn in capital inflows, the report said.
In addition, developed market equity flows (ex-US) more than doubled to $200.1bn, largely concentrated in Europe, Japan and EAFE exposures, which all set new records driven by attractive relative valuations.
Global ETPs by Exposure
Source: Blackrock
The report noted that EM equity ETP growth has not yet recovered from the taper tantrum in 2013, when it was hit by $10.3bn in outflows.
However, there was a caveat. “Excluding heavy outflows for the two largest funds, broad EM equity ETPs gathered $7.2bn, driven by low-cost core and minimum volatility strategies.
“Country fund outflows of $24bn were focused in a handful of locally-listed China A-shares funds, while China H-shares, India and Taiwan combined for inflows of $10.8bn.”
Fixed income record
Fixed income ETPs had inflows of $93.5bn for the full year, exceeding the annual record set in 2014, the report said. Fixed income had “a strong secular adoption trend” and pulled in capital due to “renewed appetite for safer investments during the heighted volatility from August through October”.
Total flows for all ETPs globally in 2015 stood at $350.9bn, up from $330bn last year and $231.6bn in 2012.
“The industry achieved organic growth of 13% this year thanks to increasing fixed income adoption and record results for non-US developed markets flows, as investors looked outside the US for better returns,” the report said.
