Investors Are Increasingly Embracing Emerging Market Equities
International equity ETFs top the inflows list
Last week’s lower volatility has pushed investors back into the markets. According to FactSet, the US-listed ETFs (exchange-traded funds) witnessed inflows of $4.9 billion. However, US equities (MS) (BAC) (GS) continued to see outflows with net redemptions of $2.4 billion. International equity added the highest inflows of $4.5 billion. Fixed-income ETFs continued their popularity amid a rise in bond yields. US fixed income collected $2 billion while international fixed income added $568.5 million. Commodities continued to see modest inflows of $450 million.
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Emerging market ETFs shine
The iShares Core MSCI Emerging Markets ETF (IEMG) was the most popular with inflows of $1.3 billion. The Vanguard S&P 500 ETF (VOO), which pulled in $852 million the week earlier, garnered $504 million last week. The SPDR Bloomberg Barclays High Yield Bond ETF (JNK) raked in $500 million amid rising investor interest in fixed-income products. Investors also shifted towards gold with the addition of $282 million in the SPDR Gold Trust (GLD).
SPY saw the highest redemptions
The SPDR S&P 500 ETF Trust (SPY) had net redemptions of $1.3 billion followed by the SPDR Dow Jones Industrial Average ETF Trust (DIA) with outflows of $938 million. Some of the select sector ETFs like the Energy Select Sector SPDR Fund (XLE), the Health Care Select Sector SPDR Fund (XLV), the Industrial Select Sector SPDR Fund (XLI), and the Financial Select Sector SPDR Fund (XLF) also had substantial outflows.
The US will report the second estimate of the fourth quarter GDP growth rate. The US will also release new home sales, pending home sales, and personal spending data for January. Canada, India, Brazil, and Switzerland will release their fourth-quarter GDP growth rate. Germany will release its inflation rate for February. The Eurozone will report its unemployment rate for January and its business confidence index for February.