Market jitters spur September flight to Treasury ETFs

Market jitters spur September flight to Treasury ETFs

Global investors pumped more than $35bn into exchange traded funds in September, but the bulk went to US Treasury funds as investors battened down the hatches and sought the safest of safe havens.

A total of $22.1bn — more than double the total for all government bonds in August — was squirrelled away into Treasuries in September, according to data from BlackRock. The lower total of $21.9bn in inflows for all government bonds indicate that Treasuries were the star of September’s show.

Government bonds including Treasuries accounted for 61 per cent of all inflows, up from just 19.8 per cent in August and the fourth-highest figure on record, BlackRock calculated.

In contrast, riskier bond exposures saw an exodus of money, with $2.7bn being sucked out of investment grade bond ETFs, $2.4bn out of high-yield bonds and $4.1bn from emerging market debt.

“We have seen a general waning of conviction around asset allocation decisions,” said Karim Chedid, head of investment strategy for BlackRock’s iShares ETF arm in the Emea region.

“We have seen a slowdown in fixed income flows, but that masks a big pick up in rates [government bond] flows, almost all short duration and an increase in the safe haven bid,” he added.

“Headline ETF