U.S. equity ETFs saw net redemptions in August but a buying spree this week fueled by the Federal Reserve’s more dovish stance is turning the tide in September, historically a weak month for stocks.
Many stock ETFs are on track for big inflows this month. For example, investors have pumped more than $12 billion into SPDR S&P 500 (NYSEArca: SPY) so far in September, according to IndexUniverse ETF flow data. SPY rallied to a new all-time high Wednesday after the Fed announced it would not taper its bond purchases. [Dow Theory Buy Signal]
Meanwhile, iShares MSCI Emerging Markets (NYSEArca: EEM) has gathered $2.9 billion and iShares Russell 2000 (NYSEArca: IWM) has attracted $1.8 billion. [iShares: Despite Appearances, Risk Appetite on the Rise in ETFs]
Just this week, Vanguard Mid-Cap ETF (NYSEArca: VO) has pulled in an “astounding” $960 million, says Chris Hempstead, director of ETF execution services at WallachBeth Capital. Also, Vanguard Extended Market ETF (NYSEArca: VXF) has increased assets under management this week by more than $425 million.
“There are a host of others but the August hysteria of ETF outflows is being replaced with inflows in September,” Hempstead said in a note Thursday. [Investors are Flocking to Europe and Mid-Cap ETFs]