An economic indicator: Why fund flows should concern investors (Part 1 of 7)
ETF fund flows are a valuable indicator of what traders are thinking. ETFs respond to changes in demand like any other investment. Understanding what the prevailing investing trends are can help investors decide whether the present time is a good one to invest in any given asset class. While ETF fund flows alone do not determine investor sentiment, they do represent the way most investors participate in the markets. Fund flows can help an investor suggest which ETFs could be next to make a big move higher or lower. In the graph shown here, we have considered the top five ETFs with highest inflow of funds for one month period of January 24, 2014 to February 26, 2014.
Browse this series on Market Realist:
- 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
- Part 4 - February 2014: A good third week for equities and high yield bonds
- Personal Investing Ideas & Strategies