Exchange-traded funds listed in the U.S. hauled in nearly $29 billion last month and investors in February are continuing to buy ETFs, which are attracting more than $1 billion a day when markets are open.
“On the heels of a strong December, ETFs brought in $28.6 billion in January, leading to the strongest two consecutive months of flows into ETFs ever,” notes Morningstar ETF analyst Michael Rawsom. “This extends the streak of monthly inflows into ETFs to 20 months.”
And recently most of that new cash is chasing the rally in stocks.
“Year to date flows into ETFs total $33.4 billion, with $30.6 billion into equity products. That is over $1 billion a day so far in 2013, handily beating the one year average of $540 million a day,” says Nicholas Colas, ConvergEx Group chief market strategist.
“There’s some seasonality there, to be sure, but there’s no doubt that investors see the utility of a prepackaged answer to their investing needs,” he said in a note.
ETFs are low-cost baskets of securities, similar to mutual funds, that can be bought and sold on exchanges during the day.
With the S&P 500 within range of its all-time highs, investors have been using equity-based ETFs to get exposure to the stock market. Equity mutual funds and ETFs pulled in $34.2 billion of net inflows in January, the highest monthly total since 1996. [Stock Funds and ETFs see Big Inflows]
“With ETF flows so solidly ‘Risk on,’ at least we know the market’s huge move from the March 2009 lows is, finally, getting some attention,” Colas said in a recent report. ['Burnburner Month' for Stock ETFs]
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