Financial sector is the standout winner
The sector ETFs continue to present opportunities and gathered record net flows of $10.9bn in January.
According to FT, in dollar terms, just $7.4bn was put to work in US equity ETFs in January, compared to $87bn in December and a monthly average of $48bn during 2021 as a whole.
Global flows into ETFs focused on technology stocks — the US trump card and typically a highly popular sector — dwindled to just $400mn, while energy and utilities ETFsattracted a net $4.4bn.
Global flows into ETFs focused on technology stocks — the US trump card and typically a highly popular sector — dwindled to just $400mn, while energy and utilities ETFsattracted a net $4.4bn.
The standout winner, though, was another sector laden with value stocks, financials, which gathered a record $10.9bn.
"We are seeing increasing demand for financials. They look good in the context of higher rates and a potentially steeper yield curve from here," said Karim Chedid, head of investment strategy for BlackRock' s iShares arm in the Emea region.
Chedid argued the switch in investors' focus was a "tilt", not a "rotation", given that there had not been a sell-off in tech or growth ETFs, just a diminution in inflows. He believed, however, there was more to come in terms of the tilt to value thanks to a wave of "economic restarting" as the worst of the pandemic recedes.
Peter Sleep, senior portfolio manager at 7 Investment Management, believed that banks were in a position to "buy back shares, pay dividends and reward, rather than punish, their shareholders."
$Financial Select Sector SPDR Fund(XLF.US$ $Energy Select Sector SPDR Fund(XLE.US$ $Utilities Select Sector SPDR Fund(XLU.US$ $Dow Jones Industrial Average(.DJI.US$ $S&P 500 Index(.SPX.US$ $Nasdaq Composite Index(.IXIC.US$ $Bank of America(BAC.US$ $Berkshire Hathaway-B(BRK.B.US$
Chedid argued the switch in investors' focus was a "tilt", not a "rotation", given that there had not been a sell-off in tech or growth ETFs, just a diminution in inflows. He believed, however, there was more to come in terms of the tilt to value thanks to a wave of "economic restarting" as the worst of the pandemic recedes.
Peter Sleep, senior portfolio manager at 7 Investment Management, believed that banks were in a position to "buy back shares, pay dividends and reward, rather than punish, their shareholders."
$Financial Select Sector SPDR Fund(XLF.US$ $Energy Select Sector SPDR Fund(XLE.US$ $Utilities Select Sector SPDR Fund(XLU.US$ $Dow Jones Industrial Average(.DJI.US$ $S&P 500 Index(.SPX.US$ $Nasdaq Composite Index(.IXIC.US$ $Bank of America(BAC.US$ $Berkshire Hathaway-B(BRK.B.US$
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