Equities, bonds ETFs drew in near-record amounts of cash in 2022: BlackRock
Investors ploughed $867 billion into ETPs 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. ...

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)