The global exchange-traded product industry garnered flows of $70.1 billion in the first quarter of 2013, up from the previous Q1 record of $65.5 billion set last year, according to BlackRock’s latest ETP Landscape report.

Equities accounted for an overwhelming 93 per cent ($65.1 billion) of total ETP industry flows as US indices reached “peak historical levels”, behind only Q3 and Q4 2008 at the tail-end of the global financial crisis, BlackRock said.  

Meanwhile, flows into developed markets equity ended the quarter at $60.5 billion, while asset-gathering was driven by funds with US exposure, at $37.3 billion. But investors also sought broad-based developed markets exposure, with this category amassing $11.2 billion during the quarter.

Emerging market equities were strong in January and finished the quarter at $4.6 billion. This was despite a “shift in investor sentiment”, which resulted in outflows during February and March, BlackRock said.

Total fixed income asset-gathering remained strong at $11.6 billion in Q1, marking the eighth consecutive quarter with inflows of at least $10 billion.  

Year-to-date 2013, flows into US-listed products represent 79 per cent of the global total, compared to 71 per cent for full year 2012. “ETP assets in the US have grown about 8.6 per cent YTD aided by market price movements with the S&P 500 crossing a psychologically important level of 1,500 for the first time since 2007,” BlackRock said.

March highlights

According to the report, last month global ETP flows of $23.5 billion were more than double the assets gathered in February. Meanwhile, equity flows of $18.5 billion lifted the category’s Q1 total to $65.1 billion - the third consecutive quarter above $50 billion and the third highest quarter for equities on record.

Developed markets equity netted $23.2 billion during the month, which BlackRock described as a “strong performance” that almost matched the $23.6 billion logged in January. Of this, 71 per cent came from funds with US exposure and US large-cap led with flows of $8.3 billion, it said.

By contrast, European equity exposures experienced outflows of $2.3 billion as “tensions prompted by the Cyprus bailout situation contributed to redemptions for the pan-European category,” BlackRock noted.

Meanwhile, gold ETPs experienced a third consecutive month of outflows ($2.4 billion), bringing total Q1 redemptions to $9.2 billion. “With rates low, the dollar strong and investors bringing money off the side-lines, meaningful headwinds persist for this category,” BlackRock said.