Increase appeal and demand of Exchange traded funds and their over takings of mutual funds, in terms of assets under management, make them excellent gauge of investor sentiment. Change in fund flows into these assets can be seen as change in investors’ mood.
Latest fund flow statistics, available from ETF.com, show further strengthening in risk sentiment in March after massive risk aversion in January and continuation of that in February.
Latest data available till March 16th shows,
- SPDR S&P 500 ETFs received biggest inflow of funds for the week, amounting to $3.14 billion.
- Vanguard FTSE developed markets ETF is second in the rank, which saw inflow $1.14 billion for the week ending March 16th.
- Bonds are back in demand too. iShares investment grade corporate bond saw inflow of $0.8 billion for the week, while Vanguard’s high dividend yield ranked fifth with $654 million inflow.
Biggest redemptions/outflow was seen in financials, Euro Zone, Europe, and Japan.
- SPDR financial Select saw net outflow of $600 million.
- Vanguard FTSE Europe suffered $533 million withdrawal
- iShares MSCI Eurozone ranked third with $ 484 million withdrawal.
- Investors withdrew $370 million from iShares MSCI Japan, $411 million and $393 million from SPDR Utilities and SPDR Health care respectively.
Looking at the funds flow, it’s hardly a wonder that S&P 500 is outperforming Europe and Japan.


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