Equity exchange traded funds have pushed into positive territory for the month of March, finally giving fixed-income funds a run for their money.
Credit Suisse analyst Victor Lin wrote in the firm’s latest edition of “Quantitative Insights” that U.S.-listed ETFs had inflows of $10 billion in March, primarily led by domestic demand for equities. Bonds saw outflows close to $5 billion, led by Treasury products as investor concerns eased and allocated back into equities.
In February, U.S. equities were avoided by investors with fixed-income investments soundly the investment of choice. In February, fixed income saw upwards of $17 billion in inflows while equities approximately $5 to $6 billion.
Lin noted that equity inflows were mostly concentrated into domestic beta – large cap ($4.3 billion) and small cap ($2 billion) exchange traded products. Looking further into the details on the sector level, financials and REIT ETPs attracted the largest inflows, followed by ETPs in technology and materials.
“ETP trading in March remained above historical averages as the easing of economic concerns and subsequent asset rotation from bonds back into equities favored beta trades,” wrote Lin.
European ETFs saw the absolute largest inflows of any geography but the amount was also the lowest it had been across the Pond since June 2013.
The report added that year-to-date, equity ETPs net flows have finally broken into positive territory. “After bottoming out in early February with nearly $40bn of cumulative outflows, equity products have quickly recovered; however, equity ETPs still trail fixed income ETP inflows for the year. “