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ETF Investors Favor Equities, Short-Duration Bonds: Schwab


Investors are increasing allocations toward equity exchange traded funds and are shifting to short-duration fixed-income assets.

According to asset flows on the Charles Schwab trading platform, ETF assets custodied at Schwab jumped 22% year-over-year to $168 billion, or up 11% for the quarter.

Among the investors, retail traders, who trade at least 36 times a year, only made up 5% of the 12-month ETF inflows, whereas retail investors and RIA clients made up the remaining 95%, with a 47% and 48% split, respectively. [ETF Chart of the Day: S&P 500]

Source: Charles Schwab

Investors showed a greater interest for equities, with international equity ETFs, notably those that track Japan, accounting for 35% of first quarter flows and sector ETFs, particularly financial, global real estate and energy, making up 14% of inflows. [Japan ETF Rakes in $5 Billion, Rallies to Highest Since July 2008]

In the fixed-income space, corporate and high-yield ETFs with shorter durations attracted inflows as investors hedged against interest rate risk. Specifically, RIA clients steered toward bank loan and convertible ETFs while retail investors moved into floating rate ETFs. [Bank Loan ETFs: More Competition in Red-Hot Sector]

Source: Charles Schwab

For more information on ETF asset flows, visit our ETF performance reports category.

Max Chen contributed to this article.