![]() ![]() ![]() ETF inflows have likely come from long-term investors, also known as the buy-and-hold crowd. So far this year, the performance chasers have stayed away (mostly). In 20, performance chasing supercharged ETF flows, with growth-seeking and tactical plays in the forefront. While global investors offload stocks and bonds, ETF customers have been buyers. First half 2022 flows of $332 billion exceed full-year levels for every year from 1993-2016, nearly match full-year 20 flows, and equal 64% of full-year 2020 flows. ![]() ETF flows are on pace to exceed all annual records with the exception of 2021. investment-grade bonds down 10.35% through June 30. The 2022 market correction has been dramatic, with global equities losing 17.67% and U.S. Staring Into the Abyss While Pressing “Buy Now” A second article will dig deep into fee compression. This article will focus on investors’ macro and strategy preferences. The divergence in investor behavior-pinching pennies on costs while adding to risk-on positions-is wide enough to warrant two separate blogs. Yet the persistence of investor preference for ever-cheaper funds across asset classes and investment strategies reminds us that price sensitivity remains a powerful force. Flows to leveraged products spiked in a shocking display of downside performance chasing. Fixed income investors sought to shore up quality and minimize interest rate risk-except when they didn’t. ![]() ETF inflows were stronger in stocks than in bonds, even though stocks fell almost twice as much. ETF flows through June 2022 make little sense, with healthy inflows persisting in the face of sharply falling markets. H1 2022 ETF Flows: Steadfast, Brave.and Foolhardy?īy Elisabeth Kashner, CFA | July 26, 2022 ![]()
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