Investors wearied by the volatility in stocks piled into bond exchange traded funds in the third quarter, while leveraged and inverse ETFs also experienced hefty inflows despite misdirected criticism of the financial products.
About $18.3 billion flowed into ETFs in the third quarter, with 73% of the total going into bonds, says ConvergEx Group Chief Market Strategist Nicholas Colas. Leveraged ETFs – both long and short funds – captured 15% of the inflow pie.
There have been 248 new ETFs launched this year, while 14 have been delisted, according to ConvergEx data.
“Industry sources tell us that trading in ETFs comprised 31% of all equity market trading in Q3 by dollar volume, up from 23.7% in Q1 and 25.7% in Q2,” Colas said in a note Tuesday.