Turns out all that market turmoil last month did nothing to slow down the growth of ETFs.
According to new data from BlackRock, global ETFs took in US$17.2 billion in August, mainly driven by non-U.S. developed markets equity and fixed income. So all that volatility in China has failed to dampen investors’ interest in ETF—although it has shaped the inflows somewhat as investors decide where to allocate their money.
Specifically European, Japanese, and EAFE equities were in the spotlight according the report—pan-European equities took in US$6.2 billion, Japanese equity funds gained US$5 billion, and EAFE funds pulled in an additional US$1.2 billion.
Read: ETF assets surge in uncertain times
Not surprisingly, ETFs provided an exit from emerging markets reeling from the crisis in China. As the Financial Post reported this morning, the Chinese government has so far poured 1.5 trillion yuan—or US$236 billion—into its tumultuous markets in order to stop the outflow of cash from China.
All told, investors pulled US$7.4 billion out of emerging markets ETFs, with broad emerging markets equities leading the way (US$3.1 billion) and Chinese equities taking a US$2.1 billion hit. Taiwan equity ETFs also suffered with redemptions of US$1.2 billion while India equities also took a US$800 million hit. That brings total emerging markets equities outflows to US$26.5 billion for the year.
Investors again turned to fixed income ETFs which took in US$8.3 billion led by U.S. Treasuries and European sovereign bond funds. The flight to safety to its toll on higher yielding fixed income—investors pulled US$900 million from high-yield corporate bond funds and US$1 billion from emerging markets bond funds.
And commodities got a US$2.3 billion bump, led by crude oil at US$1.8 billion, even though oil prices continued to nosedive.
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