After diving into fixed-income assets for most of the year, exchange traded fund investors are finally turning to stocks, with equity ETFs experiencing a record eight days of cash inflows.
According to TrimTabs Investment Research, investors funneled $45.7 billion into U.S.-listed equity ETFs in the eight trading days ended Thursday November 17 for the largest eight-session inflows on record, Reuters reports.
TrimTabs data showed that the eight-day inflow equaled 3.2% of the funds’ assets and broke the previous eight-day record of $43.5 billion set in August 2007.
Lipper data also revealed that U.S.-listed stock ETFs brought in $27 billion in net inflows for the week ended November 16, the largest such weekly inflow on record dating back to 1996.
The move has marked a reversal of trends as investors have largely jumped into fixed-income ETFs for most of the year. Investors previously believed that global central banks’ loose monetary policies would help support demand for more attractive U.S. yielding assets and keep a lid on bond prices.
According to ETFGI data, U.S. fixed-income exchange traded products gathered a record $68.35 billion in year-to-date net inflows through end of the third quarter, beating the prior record of $39.02 billion gathered over the same period in 2015, whereas equity ETPs saw $52.96 billion in net inflows.
Fueling the recent uptick in demand for stock ETFs, Donald Trump’s victory in the U.S. presidential election has triggered a stock buying frenzy and a precipitous decline in bond securities.
Meanwhile, bond mutual funds experienced an estimated $15 billion in net outflows for the month ended November 17 and are on track for their biggest monthly outflow since December 2015. U.S.-listed bond ETFs saw $2.3 billion in outflows over the past five trading sessions, which diminished the ETF asset category’s month-to-date inflow to $800 million.
For more information on the fixed-income market, visit our bond ETFs category.