The exchange traded fund (ETF) sector ignored the ho-hum performance of stocks in June and saw $20 billion in inflows during the month.
State Street Global advisors, in a recent research note, reported that despite the S&P 500’s first 2% drop since October 2014, equity ETFs were eagerly sought after by investors in June.
In its recent “U.S. ETF Flash Flows” report, State Street noted equity ETFs saw over $20BN of inflows in June, bringing their year-to-date total to $73.5 billion. For comparison, fixed income ETFs saw $1.6 billion in outflows in June.
Breaking down the assets underlying the ETFs, State Street said that ETF investors concentrated their interest toward financials and healthcare, each taking in over $2 billion of inflows. ETFs providing exposure to rate-sensitive sectors, such as real estate and utilities saw outflows of $771 million and $499 million, respectively.
Precious metal ETFs took in just $51 million of inflows during the month of June, bringing year-to-date totals to $404 million. “They will be an interesting space to watch in the near future, as equity market volatility and geopolitical risk may bring greater investor interest,” State Street wrote.
In conclusion, the report noted U.S economic news has been on an upswing as evidenced by the recent strength in the housing market, consumer confidence and jobs report. Consequently, ETFs providing exposure to U.S. companies attracted $9.4 billion of inflows in June – surpassing all other regions.
