Investors shoveled capital into ETFs during September at a very high rate. About $38 billion flowed into ETFs, the best month in several years, as investors got back into the market and off the sidelines.
“The S&P 500 returned 2.58% in September, given a boost by the Federal Reserve’s announcement of additional quantitative easing measures. The Fed’s actions are seen as designed to encourage risk-taking and as providing a boost for asset prices,” Michael Rawson wrote on Morningstar.
The U.S. equity market led the charge in September, evidenced by the SPDR S&P 500 (NYSEArca: SPY) that took in $12 billion in inflows. Rawson reports that sector-stock funds added $7 billion, while international-stock funds also added $7 billion. in total, U.S. stocks took in $18 billion last month. [SPY: A Classic ETF]
“Within each asset class, the riskiest segments attracted strong inflows. Among fixed-income funds, high-yield bond ETFs saw inflows of $1.6 billion; among U.S. stocks, small-caps gathered $2.8 billion; among international stocks, emerging markets collected $2.9 billion; and among sector stocks, real estate and financials took in more than $1 billion each,” Rawson wrote. [Surveying S&P 500 Index ETFs]
Positive sentiment regarding the latest jobs report has also added to the so-called risk-on attitude. The unemployment rate dropped to 7.8% from a previous 8.1%, the lowest level seen since January 2009, reports Midnight Trader staff on Nasdaq. Investors will now be focused on the Presidential election and any extension of tax cuts and policies to ease the fiscal cliff around the corner. [ETFs and the Presidential Election]
SPDR S&P 500 ETF
Tisha Guerrero contributed to this article.
Full disclosure: Tom Lydon’s clients own SPY.
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