Headlines this week have focused on the record outflows in ETFs in August, with U.S. stock ETFs shedding over $14 billion. However, Rosenbluth points out that all but $500 million of this was tied to one fund, SPDR S&P 500 (NYSEArca: SPY).
“Despite the outflows across the broader asset categories in August, we think investors will bring fresh money back in throughout the year. The appeal of ETFs remains high, in our opinion, as investors have thousands of ways to get exposure to the equity, fixed income and commodity markets at a relatively low cost and with greater transparency than they can through mutual funds,” Rosenbluth said in a note.
“S&P Capital IQ believes that while the U.S. equity markets should trade sideways in September, there is room for further upside. We also see further growth ahead for Europe, with improving economic data. Lastly, while investors will likely remain concerned about interest rates, we think there are a number of good short-term focused fixed income offerings,” he added.
Full disclosure: Tom Lydon’s clients own SPY.