US ETPs back above $1trn as market rallies

US ETPs gained $50bn of assets last week as equity markets staged a strong recovery, reports Deutsche Bank.

The S&P 500 rose by 6%, allowing ETPs to recoup some of the losses made during the falls over the past few weeks. Other developed and emerging markets also moved up.

Total ETP assets at the end of the week were $1.02trn, an increase of 2.6% year-to-date and there were $2bn of inflows into US ETPs.

Deutsche says that although it is too early to tell if there is a reversal of risk-off sentiment, ETP flows suggest increased risk appetite. Equity ETPs had inflows of $5.5bn and fixed income had $1.3bn, while commodity ETPs had outflows of $0.3bn.

Asian ETP assets also recovered some of their losses, ending the week at $91.4bn, an increase of 3.3% from the previous week.

ETF flows were still below average, however. Cowen reports that European ETFs dropped 13% from their three-month average flows, while US ETFs fell 10%, "this is evidence of the rally being related more to position covering/neutralizing rather than fresh money being put to work", according to Cowen.

Asset segment flows were muted, emerging markets ETFs continued to lose assets (this is the 11th consecutive weeks of emerging markets equity outflows) and equity ETFs generally lost assets.

In the fixed income ETF market, high yield funds lost out to investment grade bond ETFs - Lyxor reported €53mn of creation orders between the two issues, while iShares saw $70mn of redemptions in euro government bond ETFs.

Gold reversed its fortunes, having seen outflows; there were creations in gold ETF last week. ETF Securities reported inflows of $152mn. There were some buyers of copper ETFs, following the price drop.