According to research by US fund giant BlackRock, inflows of $52bn (£36.3bn, €47.5bn) into ETFs during December last year were the best of the year, and came despite the rising volatility in world markets
Europe flows totalled $82.2bn in 2015, setting a new record overall as well as for both equity with $50.6bn and fixed income with $30.3bn.
Asia Pacific inflows of $27.1bn were close to the 2012 record of $30.6bn, with a new high for Japan equity trackers of $37.2bn offset by China equity redemptions of $21.7bn.
Overall, 80% of non-U.S. developed markets equity flows were in three categories; broad Europe with $65.8bn, Japan with $50.1bn, and the EAFE index, which tracks the major equity markets of Europe, Australia and Southeast Asia. with $45bn. All of these amounts were new records.
“The industry achieved organic growth of 13% this year thanks to increasing fixed income adoption and record results for non-U.S. developed markets flows as investors looked outside the U.S. for better returns,” BlackRock said in its research report for the year.
The unprecedented results came despite more moderate flows for US equities, which make up just under half of all assets.
Fixed income demand
Fixed income flows of $93.5bn were a strong feature of the growth in 2015, posting 22% organic growth and eclipsing the record set in 2014, despite concerns over the impact of the Fed interest rate increase that finally materialized in December.
Fixed income accounted for 27% of global ETP flows this year, including 24% in the US, 37% in Europe and 30% in Canada (see below).
Flows into ETFs also picked up in the months following the market turmoil at the end of August as investors became more risk averse.
BlackRock said its iShares franchise generated $130bn of net inflows during the year and saw it capture the largest share of inflows globally, in the US and in Europe in 2015.
It said iShares also led the industry with $50bn in fixed income ETF flows, as clients increasingly recognised that the liquidity, low cost and tax efficiency of ETFs applied equally to fixed income products as they do to equities.
Results disappoint
Despite the massive inflows its investment products, BlackRock on Friday actually reported quarterly profits that were weaker than analyst’s forecasts largely due to higher compensation costs.
Overall the world’s laergest asset manager reported a profit of $861m in the fourth quarter, up from $813m a year earlier. Revenues edged up 2.8% to $2.86bn.
At the end of 2015 BlackRock had $4.65trn of assets under management.
