Global Exchange Traded Product flows in July – global flows YTD have now surpassed 2020’s total

The summer lull looks to be in full effect, as flows into global ETPs in July hit their lowest level since October 2020 with $75.5B added, down 45% on June’s $135B.

The fall in headline figures was due to equity flows more than halving to $51.9B, while fixed income flows rose to $24.3B – the highest level in three months – and commodity flows remained relatively flat. Despite the drop in headline flows, buying in global ETPs in 2021 has now surpassed 2020’s annual total, with $769.2B added YTD vs. $757.9B for all of 2020.

Key themes in July:

US equity flows dip

  • A drop in US-listed US equity flows is almost entirely responsible for July’s fall in equity flows, with net inflows of $20.6B significantly down from the $67.5B added to US-listed US equity in June, which was the second-highest inflow month on record for the exposure. Flows into EMEA-listed US equity ETPs dropped slightly to $2.8B (vs. $3.4B in June).
  • The inverse was true for European equity ETPs, where buying fell to the lowest level since January 2021 ($1.3B, vs. $6.2B in June). In European equity, the larger drop in flows came from EMEA-listed ETPs, which contracted 84% MoM to just $0.3B, while US-listed flows fell 79% to $0.9B.
  • Emerging market (EM) equity was a relative bright spot in July, with flows increasing to $3.7B (vs. $0.5B in June), while Japanese equity flows also picked up to the same figure. Within EM equity flows, APAC-listed exposures recovered from the $4.5B out in June with $1.4B added in July, offsetting the fall in EMEA-listed flows from June’s net buy of $1.7B to a net sell of $0.2B in July. Single exposure ETP flows outpaced broad EM, reversing last month’s trend, with investors allocating to China equity.


Inflating records

  • Flows into inflation-linked bond ETPs set a new monthly record in July ($4.5B), surpassing the previous record set in May ($4.4B). In line with the trend we have seen so far this year, July flows largely went into US inflation linkers, but investors continued to allocate to global and eurozone linkers as well, albeit at much lower levels – $0.1B and $0.2B, respectively.
  • Buying in linker ETPs has now hit $26.1B for the year, more than the annual inflows into the exposure from 2018-2020 combined ($23.6B).
  • Elsewhere in fixed income, rates continued to be popular with inflows of $4.7B, while EM debt ETP inflows hit the highest level in three months, with $3.2B added. Buying in credit remained muted, with the $0.8B added to investment grade (IG) offset by the $1.1B out of high yield (HY) exposures


Tech on a high

  • The quality tilt in sector flows that we highlighted in June carried over into July, with tech flows up to $5.4B – the highest level since February’s record $13.4B – and healthcare flows rising to $4.3B – the highest level since the record $7.1B added in April 2020. This has come at the expense of cyclical sectors, with energy, financials, materials and industrials all registering outflows – the first time since May 2019 that all four sectors have simultaneously seen a net monthly sell.
  • Delving deeper, tech flows predominantly went into US exposures ($2.7B), while China tech notched up a record inflow month with $1.9B added. US exposures also accounted for $3.3B of all healthcare flows, and $3.2B of the $3.3B outflows from financials.
  • Quality factor ETPs hit a record $2.9B in July, smashing the previous record of $2.5B set in January 2019. While value flows succumbed to the rotation with record outflows of $1.6B, YTD inflows into value are still on track to be a record with $17.7B added so far in 2021 (vs. the standing record of $6.7B in 2020).


Sustainable ticks up

  • July saw a significant pickup in sustainable flows, with net inflows for US and European-listed ETPs up to $11.7B for July (vs. June’s $8.7B). This made it the fifth largest NNB month on record, following the four months from November 2020 – February 2021.
  • The bulk of July’s sustainable flows came from EMEA, with $8.8B added to sustainable strategies. These were dominated by ESG best-in-class and ‘Factors + ESG’ focussed strategies, which brought in $3.9B and $3B, respectively. Within ESG best-in-class, US ($930m) and global equity exposures ($518m) led the way, while European fixed income ESG saw a net buy of $378m.

Featured News

This Week’s Most Read

  • Is value investing coming back? For some of us it was never gone

    Reports of value investing’s demise have been greatly exaggerated… By Abdulaziz Alnaim, Portfolio Manager, Mayar Fund If I was given a dollar for every time someone told me that value

  • Is there a bull in the China shop?

    We bring you the views of two asset managers on China’s recent tightening of regulations. Mark Martyrossian, the CEO at Aubrey Capital Management, said: “The carnage wrought in several sectors

  • Brewin Dolphin grows investment solutions team

    Wealth manager Brewin Dolphin has grown its investment solutions team with the appointment of three portfolio analysts. The hires support the company’s successful build-out of its investment propositions for advisers,

  • Structural change at the office?

    By Ignacio Mendez, head of research at Mirabaud Equity Research in Madrid After the summer holidays, we expect to see normality anew at offices, where all signs suggest that, to

  • Welcome to the Wealth DFM Podcast

    Wealth DFM Magazine is delighted to launch our latest podcast. In this insightful episode Sue Whitbread, Editor of Wealth DFM Magazine, sits down with two of Legal and General Investment

  • The new reality: every client is an ESG client

    In Invesco’s recent survey, nearly four out of five (79%) investors declared that sustainability is important to how they invest. More than half (52%) of those not already investing sustainably

  • Why companies in India are increasing their focus on sustainability

    By Vinay Agarwal, director and portfolio manager at FSSA Investment Managers, part of First Sentier Investors. In our view, several factors make India an attractive market to invest in over

  • Supply chain problems hit Primark as it hints of a new digital future

    Hargreaves Lansdown’s Susannah Streeter discusses the outlook for fashion chain Primark. Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, comments: “For now Primark is still firing on all

  • Hargreaves Lansdown: Future of the high street betting shop looks secure with William Hill deal

    Hargreaves Lansdown’s Susannah Streeter discusses the news 888 Holdings has purchased William Hill’s International assets. Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, comments: “Online wagers may have

Wealth DFM