Equities, bonds ETFs drew in near-record amounts of cash in 2022: BlackRock

LONDON, Jan 9 (Reuters) - Investors ploughed $867

billion into ETPs (exchange-traded products) in 2022, the second

biggest inflow after 2021's record $1.29 trillion, despite a

hugely volatile market environment, data from BlackRock showed

on Monday. ETPs across asset classes recorded inflows, with equity ETPs

enjoying bumper inflows despite plunging global stocks, while a

shift to rates-driven investing was seen in bond ETPs flows,

despite central banks around the world tightening financial

conditions to temper inflation. "If you look at the market context for 2022, on the surface

you would expect that the flows would have been more muted,

because stocks and bonds declined by double digits compared to

2021," Karim Chedid, BlackRock's EMEA head of investment

strategy for its iShares unit, said. "But we have seen the second-best year for ETF flows on

record, only behind 2021. This shows the acceleration of ETFs as

an investment vehicle of choice in 2022." Exchange-traded products include exchange-traded funds

(ETFs), exchange-traded notes (ETNs), and other products. ETFs

are traded like shares and track an index, either via an

underlying asset, or by synthetically replicating the returns

using derivatives. Last year marked the third-largest inflow into fixed-income

ETPs on record, with flows of $266 billion. The figures closely track the record-breaking $280 billion

and $269 billion inflows into bond ETPs of the previous two

years, though allocations have shifted significantly according

to BlackRock. Within fixed income ETPs, rate ETPs drove 68% of overall

inflows in 2022, over three times the corresponding level in

2021, with over 90% of that going into U.S. products, BlackRock

said in its report. EQUITIES But investors were picky about what they bought. Inflows

into investment-grade credit ETPs reached $40.1 billion, while

high-yield credit ETPs recorded outflows of $5.6 billion. There were also outflows from inflation-linked bonds and

emerging-market debt ETPs, which reached $14.6 billion and $9.2

billion, respectively. Major equity indexes plunged in value in 2022 as Russia's

war in Ukraine caused an energy squeeze and triggered soaring

inflation. The S&P 500 index lost almost a fifth of its

value while Europe's STOXX 600 ended the year down 13%. Despite this, equity ETPs saw the second-highest yearly

inflows on record, reaching $598 billion, although this was

below the $1 trillion seen in 2021. "Within equities, flows were positive but still defensively

tilted; for instance the sectors that saw the largest demand

were healthcare, tech and utilities with a significant

preference for these vs cyclicals," Chedid said. The picture was less positive for commodities, which

recorded net outflows of $9.5 billion, even though oil and gas

prices soared for most of last year. Meanwhile, investors set a record for the biggest inflow

into emerging market (EM) equity ETPs, snapping up $110 billion,

up from $90.4 billion in 2021, with Chinese equities accounting

for $63.7 billion of that. "From a macro perspective, it has to do with the fact that a

lot of the EM central banks already hiked rates before and are

fundamentally in a better place than previous rate hike cycles,"

Chedid said. "Finally, the tailwind from China reopening late in the year

helped accelerate this trend," he said.

(Reporting by Lucy Raitano; Editing by Amanda Cooper and Alison

Williams)