August 14, 2008 at 1:00 am by Tom Lydon
The numbers are telling us that equities are slumping, so where are exchange traded fund (ETF) investors putting all of their money?
Through July 31st, ETF assets were heavy in equities, but over the past year, cash flows have been different, reports Matthew Hougan for Index Universe. According to the National Stock Exchange numbers, the money is filtering into fixed-income, and commodities, currency and international equities.
As equities are wilting, investors are turning to alternatives like commodities and fixed-income.
The chart Hougan assembled is very telling:
- Domesitc Equities: 58% of assets, 34% of new cash flows
- International Equities: 27% of assets, 3% of new cash flows
- Fixed Income: 8% of assets, 35% of new cash flows
- Commodities: 7% of assets, 22% of new cash flows
- Currencies: 1% of assets, 6% of new cash flows
The story, he says, is obvious: investors are moving into alternative assets. The ETF industry has been noticing, too. Case in point: until last year, there were only a few fixed-income funds available, but now there are dozes. And don’t forget the slew of commodity launches earlier this year.
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