Stock-based ETFs are attracting the lion’s share of new money so far this year as major U.S. equity benchmarks such as the Dow Jones Industrial Average break out to new all-time highs.
First-quarter ETF flows illustrate that “capital has consistently looked to add risk” with 83% of all fresh cash, or $48.2 billion of $51.4 billion, going to equity funds, according to Nicholas Colas, ConvergEx Group chief market strategist. “Fixed income products as a whole aren’t catching much traction in 2013, with just $5 billion in new capital.”
In stocks, the most popular sector ETFs in the first quarter are real estate, financials and energy.
Elsewhere in the equity space, low-volatility ETFs are also hot, and fund providers are set to introduce more products. The iShares MSCI USA Minimum Volatility ETF (NYSEArca: USMV) and PowerShares S&P 500 Low Volatility Portfolio (NYSEArca: SPLV) have gathered $1.4 billion and $735 million, respectively, according to IndexUniverse flow data. [Low-Volatility ETFs: Strong Demand]
Meanwhile, gold ETFs have seen the largest outflows with SPDR Gold Shares (NYSEArca: GLD) and iShares Gold Trust (NYSEArca: IAU) losing a combined $6.9 billion.
“That’s 10,500 standard gold bars (400 ounces each), or 131 tons,” Colas said in a note. “Which is like selling down all the gold in either South Africa’s or Sweden’s central banks in less than 90 days.”