October has a mixed reputation in financial markets. It is the last month in the worst six-month cycle for stocks, but it is also the month where some of history’s worst bear markets have died. Despite the government shutdown and the ensuing threat of a debt ceiling crisis, October 2013 has been a banner month for ETF inflows.
With nine trading days left in the month, $47 billion has already flowed into ETFs since the start of September, report Whitney Kisling and Nick Taborek for Bloomberg. Over the previous three months, a net $11 billion flowed into ETFs despite $29 billion in combined outflows in June and August.
Investors poured $7 billion in ETFs in a single day – October 17, the day policymakers reached an agreement to reopen the government, averting a debt ceiling debacle in the process. About $725 million went into ETFs on Oct. 16, $6.9 billion on Oct. 17, and $2.5 billion on Oct. 18 with the 17th being the best inflow day in a month, according to Bloomberg.
The recent inflow data jibe with predictions made earlier this year of 2013 proving to be a stellar year for the roughly $1.5 trillion ETF industry. In May, Nicholas Colas, chief market strategist at ConvergEx Group, said ETFs could see $200 billion in inflows this year. [ETF Inflows Could Hit $200B in 2013]
Since September 1, some of the largest ETFs have grown in significant fashion. For example, the iShares MSCI Emerging Markets ETF (NYSEArca: EEM) has seen inflows of nearly $4.9 billion while the iShares Russell 2000 ETF (NYSEArca: IWM) has hauled in more than $1.3 billion. [Emerging Markets ETF Sees Inflows]
In just the past month, the PowerShares QQQ (NasdaqGS: QQQ), the NASDAQ 100 tracking ETF, has pulled in nearly $1 billion as the NASDAQ Composite has gained nearly 3.7% over the same time.