For instance, BlackRock, the world’s largest asset manager, alone brought in net inflows of just over $28 billion into its iShares ETF business in January, or up 46% for the same month year-over-year. Vanguard, the world’s second largest asset manager, saw inflows of over $11 billion in January, or down around 30% for the same month year-over-year.
Observers also pointed to the extended bull rally in equities as a major contributor to ETF demand, with the S&P 500 index touching an all-time high on January 26.
Despite the recent sell-off and drawdown in equity ETFs, BlackRock believed the correction provided “an opportunity to add risk to portfolios.” The asset manager said the US stock market pullback was “mainly driven by an unwinding of popular trades betting on low equity volatility.”
The selling may be sort lived and we may return to businesses as usual, with ETFs riding on the ongoing bullish sentiment.
“While volatility may persist in the very near term, we remain confident that the [equity]bull market remains intact,” Mark Haefele, global chief investment officer of UBS Wealth Management, told FT. “We may have moved from being ‘overdue’ for a pullback to approaching ‘overdone’ with this sell-off.”
For more information on the ETF industry, visit our ETF performance reports category.