US Equity ETF Inflows Rebounded Sharply
Inflows into US equity gathered steam
More than a 90% recovery in the stock markets after the recent correction has boosted investors’ confidence in the continuation of the rally, which led to substantial inflows into US-listed ETFs. According to FactSet, ETFs witnessed inflows of $12.3 billion last week. All the asset classes witnessed positive inflows led by US equity (MS) (BAC) (GS) (JPM) with net additions of $9.9 billion. International equity had inflows of $1.0 billion. Fixed-income ETFs lost some popularity last week with modest inflows with net additions of $733.5 million, while international fixed income added just $84.6 million. Commodities had $357.5 million.
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SPY finally sees positive inflows
The SPDR S&P 500 ETF Trust (SPY), which witnessed substantial outflows after the recent correction, finally saw course correction with inflows of $4 billion. The PowerShares QQQ Trust (QQQ), the iShares Core S&P 500 ETF (IVV), and the Vanguard S&P 500 ETF (VOO) were the other popular ETFs with net additions of $1.8 billion, $1.3 billion, and $676 million, respectively. Some of the bond ETFs like the iShares Core U.S. Aggregate Bond ETF (AGG) and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) also had substantial inflows of $1 billion and $371 million, respectively.
Bond ETFs saw outflows
Outflows were mainly led by bond ETFs even as the ten-year bond yield remained steady last week at 2.9%. The iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) tops the list with net redemptions of $550 million. The iShares 20+ Year Treasury Bond ETF (TLT), the Vanguard Short-Term Corporate Bond ETF (VCSH), and the SPDR Portfolio Intermediate-Term Corporate Bond ETF (SPIB) were the other ETFs that saw outflows of $332 million, $283 million, and $168 million, respectively.
The Euro Area will report the third estimate of the fourth quarter GDP growth rate this week while Japan will also release its final annual GDP growth data. Central banks of Japan, the Euro Area, Australia, and Canada will announce their interest rate decisions as well. The US, China, Canada, and Australia will report their balance of trade data for January. The US will report its unemployment rate for February. The US unemployment rate dipped to a 17-year low of 4.1% in January 2018.