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Blackrock sees cash pour into gold ETFs

Blackrock sees cash pour into gold ETFs

Global investors ploughed into gold and gold exposed exchange traded funds last month, according to the latest figures from BlackRock.

Figures from the asset manager showed gold exchange traded products attracted $5.4bn (£3.72bn) in May, outpacing their two closet rivals, investment grade corporate bonds which saw inflows of $2.8bn, (£1.9bn) and the real estate sector into which investors put $1.9bn (£1.3bn).

Ursula Marchioni, chief strategist of iShares EMEA at BlackRock, said the trend for gold exposure signaled a “flight to safety” as investors try to escape volatile markets.

Earlier this year, ratings agency FundCalibre revealed “unloved” investments, such as gold and emerging markets, were raking in the best returns of any sector.

Overall, equity ETPs saw net outflows of $3.7bn (£2.5bn) in May, weighed down by European equities, which saw outflows of $5.1bn (£3.52bn).

Ms Marchioni said gold and equities have returned to being negatively correlated this year - with demand increasing as the risk assets fall out of favour.

Investors are turning to the precious metal as a “portfolio diversifier”, she said.

In fixed income, the BlackRock report revealed investors favoured investment grade corporate bonds, with money flowing out of high yield corporate debt and US Treasury.

Ms Marchioni said the May flows “appear to suggest that ETP investors are signalling no conviction, with some flows expressing risk-off, whilst others indicating risk-on”.

Andrew Whiteley, director of Proviso Financial Planners, said he has been buying gold exposure through a broad commodity ETF over the last few years, but he would not increase his exposure.

katherine.denham@ft.com