BlackRock says investors are piling into emerging market ETFs — and it's a sign that the US economy is slowing

Investors are piling into emerging market ETFs looking for cheap valuations after December's sell-off, and dovish central bank policy makes those assets more attractive.

Investors are fuelling massive inflows into emerging market and US Treasury exchange traded funds in a bid to ensure they don't miss out on rallies outside of developed economies.It's important because it shows a shift in sentiment from investors away from investment grade assets in the US and Europe, amid uncertainty about the future of the global economy. Fixed income in emerging markets is a particularly promising sector, according to BlackRock.

Fixed income or bond ETFs saw inflows of $30 billion in the first quarter, bringing total assets in the space to nearly $1 trillion. Other ETFs saw outflows — particularly in equities, as analysts predict a slowdown in S&P 500 growth,"There's a questioning of how much higher equity markets can go which is leading investors into a flight to quality," according to Tim Urbanowicz, senior fixed income ETF strategist at Invesco, in an interview.

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