An economic indicator: Why fund flows should concern investors (Part 6 of 7)
Investors pulled out more than $9.79 billion from ETFs in the week ended February 6, bringing down the total U.S.-listed ETF assets by 4 % to $1.625 trillion. After the financial crisis, ETFs relied heavily on equities in 2013, as the S&P 500 Index went up by around 30% during the year. The market has fallen by around 4% in 2014, as economic data show elevated level of uncertainty.
Also, concerns in other parts of the globe such as Japan and Europe about an asset-price bubble in the emerging markets added to investors’ dilemma. Although it is a little farfetched to talk about any ensuing crisis, uneasiness in investor sentiments led to a surge in demand of bond ETFs. Plus, there was the concern in other parts of the world, such as Japan and Europe, that an asset-price bubble that has been growing in the emerging markets over the past five years may be deflating.
The iShares 1-3 Years Treasury Bond ETF (SHY) led all bond funds, raking in $3.7 billion last week and bringing its total assets up to $11.86 billion. The SPDR S&P 500 (SPY) was the least popular ETF last week, redeeming $8.63 billion and bringing its assets down to $144 billion.
Browse this series on Market Realist:
- Part 1 - Must know: Why should investors follow fund flow data carefully?
- Part 2 - A quick recap: The fund flows and the ETF market in February
- Part 3 - Market scenario: Equity ETFs outperform high yield bond ETFs
- Investment & Company Information