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In like a lion, out like a lamb. It's a saying typically used to describe the weather in March. But it could also be used to characterize the trend we saw in global exchange-traded product (ETP) flows as we transitioned out of March and into April.

Year-to-date flows into global exchange-traded products have reached $79.9 billion, outpacing the $66.3 billion of inflows gathered in that same period last year. But global ETP flows slowed in April to $10.3 billion as investor sentiment cooled given less positive economic growth forecasts.

The month's $9.5 billion of flows into fixed-income ETPs and $9.6 billion of flows into stock funds were offset by $8.7 billion of outflows from gold ETPs. Lower U.S. inflation expectations, a disappointing Chinese GDP report, and rumors of potential gold reserve sales by distressed European countries triggered the largest gold spot price decline in 30 years.

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This cautious investor mindset was also reflected in fixed-income ETP flows. These funds attracted $9.5 billion in April, the best performance since May 2012, with U.S. Treasuries funds leading the way. U.S. Treasuries garnered $2.2 billion of inflows despite a continued environment of persistently low yields. Short maturity funds also remained a focus, gathering $5.6 billion, although it's worth noting that other maturities fared well for the second straight month after a slow start to the year.

Meanwhile, global stock funds took in $9.6 billion, which was down from $18 billion in March, despite the S&P 500 remaining near its all-time high. U.S. large-cap stock funds swung to outflows mid-month on the heels of lackluster reports on U.S. and Chinese economic growth, but finished the month in positive territory with inflows of $1.7 billion. Investor preference for developed markets over emerging also continued, albeit at a slower pace than prior months with $3.5 billion in outflows for April among ETPs offering emerging-market equity exposure. Within developed markets, ETPs offering exposure to Japan equities led the way, taking in another $4.8 billion in new assets for the month.

In an interesting development, non-market-cap-weighted funds have captured 42% of equity ETP flows year to date. That is more than two times their share of equity assets. A big driver of this growth is investor demand for dividend income funds, with these ETPs attracting $3.4 billion of flows in April -- a new record monthly high. Also driving this growth into non-market cap weighted funds -- flows into minimum volatility funds. The concept behind these funds is that they track indexes that seek to capture the broad equity market exposure of a particular market segment -- like emerging markets or global stocks -- with a reduced amount of volatility. This focus by investors on non-market-cap-weighted funds is a trend we are keeping our eye on and will delve into in more depth in a future article.

Sources: Bloomberg, BlackRock.

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Disclaimer: There is no guarantee that minimum volatility funds will attain a more conservative level of risk, especially during periods of extreme market conditions.

Source: What The Flows Show: Caution Blows In ETF Flows