Investors pulled record amounts of money out of exchange-traded products last month on the back of concerns over the Federal Reserve’s stimulus and the health of global growth.
According to the BlackRock ETP Landscape report for August 2013, the products suffered outflows of $15bn (£9.6bn), which is the largest monthly outflow on record for global ETPs and above the previous $13.4bn record set in January 2010.
ETP outflows were driven by the $9.4bn withdrawn from equity products. The US was the main source of redemptions as a net $14.5bn was taken from US ETPs – with $14bn of this coming from the SPDR S&P 500 ETP.
However, European equities were a bright spot” during April as investors poured $4.7bn into pan European equity ETPs after the eurozone showed signs of coming out of its 18-month-long recession.
Within fixed income, outflows from bond ETPs reached $5.3bn. Some $8.1bn was redeemed from ETPs with longer/broader maturity profiles, offsetting the. inflows witnessed by short maturity funds.
BlackRock ETP Insights head Raj Seshadri says: “Investors remained cautious in August due to continued uncertainty about US economic growth and Federal Reserve policy.
“Continued uncertainty around the timing of the Fed’s tapering, the direction of economic data and potential geopolitical conflict is likely to lead to increased volatility for equity and bond markets in September.”