U.S. Weekly FundFlows Insight Report: Q2 Opening Day: Investors Continue Trend Into Short-Term Assets

After leading the subgroup in net inflows last week, large-cap ETFs were the largest detractor of equity ETF flows, losing $1.9 billion. Despite positive weekly performance (+2.36% on average), large-cap ETFs saw net redemptions for the first time in four weeks.

The top two ETFs for net inflows were iShares: MSCI Emerging Markets (EEM, +$1.7 billion) and Financial Select SPDR (XLF, +$946 million). The newly launched ARK Space Exploration & Innovation (ARKX) took in a noteworthy $344 million, landing tenth on our list of top ETF equity inflows for the week. On the flip side, Invesco QQQ Trust 1 (QQQ, -$3.8 billion) and SPDR S&P 500 ETF (SPY, -$1.7 billion) realized the largest net outflows for the week. Both funds found themselves on our top inflows list last week.

Exchange-Traded Fixed Income Funds

Taxable fixed-income ETFs attracted $5.2 billion in net inflows, marking its largest total inflow since October 2020 and the twentieth-largest weekly inflow of all time. Government-Treasury ETFs (+$1.8 billion), corporate-investment grade ETFs (+$1.4 billion), and corporate-high yield ETFs (+$1.3 billion) all recorded positive net inflows. Government-Treasury ETFs have gone back-to-back weeks recording the top net inflow in the subgroup as investors seek the stability of principal protection.

For the twenty-second time in the last 23 weeks, tax-exempt municipal bond ETFs witnessed weekly net inflows (+$218 million).

The two fixed-income ETFs that recorded inflows over $1 billion are also focused on short-term U.S. investment-grade corporate debt and intermediate-term U.S. Treasury bonds. iShares: 1-5 Year Investment Grade Corporate Bond (IGSB) and iShares: 7-10 Year Treasury Bond ETF (IEF) attracted $1.2 billion and $1.1 billion, respectively. Investors appear to be avoiding the long end of the curve as iShares: 20+ Year Treasury Bond ETF (TLT) was the laggard of the subgroup, suffering $826 million in net outflows.

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