So much for the summer doldrums. The Dow Jones Industrial Average is sitting on a triple-digit gain, having earlier touched a new intraday record high during Monday’s trading session.
While the S&P 500 has another eight points to go to get back to its record high touched on July 3, July has been a strong month for U.S. equities. That much is confirmed by investors’ appetite for equity exchange traded funds, reversing a trend seen earlier this year when bond funds dominated inflows. [Q2 ETF Flows Firm Up]
“ETF investors are bullish on U.S. equities, with YTD flows of $25.7 billion and $5.9 billion in the 9 days of the new month. The story flips when it comes to fixed income products, with bond mutual funds receiving $52.9 billion YTD and a steady $2-4 billion/week over the last four weeks. ETF investors are net sellers of bonds – $2.4 billion out since the beginning of July and $5.6 billion in the last month,” said Nicholas Colas,chief market strategist at ConvergEx Group, a global brokerage company based in New York, in a note out Monday.
While the Vanguard Total Bond Market ETF (NYSEArca: BND) and the iShares Core U.S. Aggregate Bond ETF (NYSEArca: AGG) remain among the top-10 asset gathering ETFs on a year-to-date basis, no bond funds are among the top-10 third-quarter asset gatherers. That group is led by the SPDR S&P 500 ETF (NYSEArca: SPY). The world’s largest ETF has added $4.2 billion since the start of this month.
“U.S. stocks are the winners of the ETF money flow derby, with $18.9 billion in money flows over the last month and $5.9 billion in July. That is 86% and 81% of the totals mentioned in the prior bullet. Fixed income products, by contrast, are net losers. In July alone, ETF investors have pulled $2.4 billion out of bond products, and $5.6 billion over the past month,” added Colas.
Other top-10 asset gatherers since the start of July include the iShares Core S&P Mid-Cap ETF (NYSEArca: IJH), PowerShares QQQ (NasdaqGM: QQQ) and the iShares MSCI Emerging Markets ETF (NYSEArca: EEM). No ETF gained more new capital than the nearly $6 billion added by EEM in the second quarter. That helped BlackRock’s (NYSE: BLK) iShares lead all ETF issuers in second-quarter flows. [iShares Leads Q2 ETF Flows]