U.S. Weekly FundFlows Insight Report: ETF And Fund Investors Focus On Fixed Income During The Fund-Flows Week

U.S. stocks tumbled on Monday, October 19, with the Dow booking its worst day in four weeks as investors worried about the lack of a stimulus package being completed before the November 3 elections. Investors shrugged off news that China’s Q3 GPD grew by 4.9%, instead of focusing on lawmakers’ inability to strike agreement on a new fiscal stimulus plan. However, on Tuesday, the market was lifted after House Speaker Nancy Pelosi indicated that stimulus talks weren’t over. Investors were also lifted by news that September housing starts rose by almost 2% and building permits rose by 5.2%, both beating analyst expectations. On Wednesday, stocks sagged after Senate Majority Leader Mitch McConnell urged the White House and Republicans against striking a big coronavirus deal ahead of the elections.

Exchange-Traded Equity Funds

Equity ETFs witnessed net inflows for the second consecutive week—however, they attracted just $304 million for the most recent fund-flows week. Authorized participants (APs) were net purchasers of domestic equity ETFs (+$64 million), injecting money also for the second week in a row. And for the fourth week running, nondomestic equity ETFs witnessed net inflows, taking in $240 million this past week. SPDR S&P 500 ETF (SPY, +$5.2 billion) and iShares ESG Aware MSCI EM ETF (ESGE, +$563 million) attracted the largest amounts of net new money of all individual equity ETFs. At the other end of the spectrum, Invesco QQQ Trust 1 ETF (QQQ, -$2.1 billion) experienced the largest individual net redemptions, and iShares Russell 2000 ETF (IWM, -$1.1 billion) suffered the second largest net redemptions of the week.

Exchange-Traded Fixed Income Funds

For the fourth straight week, taxable fixed income ETFs witnessed net inflows, taking in $1.7 billion this last week. APs were net purchasers of corporate investment-grade debt ETFs (+$1.4 billion) and government-Treasury ETFs (+$395 million) while being net redeemers of corporate high-yield ETFs (-$289 million) and flexible funds (-$158 million). iShares 10+ Year Investment Grade Corporate Bond ETF (IGLB, +$580 million) and iShares 10-20 Year Treasury Bond ETF (TLH, +$358 million) attracted the largest amounts of net new money of all individual taxable fixed income ETFs. Meanwhile, iShares 5-10 Year Investment Grade Corporate Bond ETF (IGIB, -$776 million) and SPDR Bloomberg Barclays High Yield Bond ETF (JNK, -$632 million) handed back the largest individual net redemptions for the week. For the first week in three, municipal bond ETFs witnessed net outflows, handing back $117 million this week.

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