SINGAPORE (March 21): Inflows into US-listed exchange-traded funds (ETFs) last week continued at a record pace even as the global stock market powered to a new high, according to DBS Group Research.
This comes despite an anxious week headlined by a meeting between Chancellor Angela Merkel and President Donald Trump, two of the most powerful leaders of the Western liberal free world, which was described as “chilly” and “awkward”.
In addition, the US Federal Reserve at the Federal Open Market Committee (FOMC) meeting last week raised its benchmark lending rate a quarter point and continued to project two more increases this year.
But DBS’s regional research team says in a Tuesday report that the stock market is “alive and well as the Fed raises rates, but not fears.”
For the week ended March 16, US-listed ETFs posted weekly net inflows of $19.0 billion, bringing year-to-date inflows to $124.7 billion, according to DBS. Total assets in the US ETF marketplace stood at $2,803 billion.
US equity ETFs saw the largest weekly inflows of $13.2 billion, even as the S&P 500 hovered near record highs.
International equity ETFs also garnered favour, says DBS, with weekly net inflows of $3.5 billion.
Despite the Fed rate hike, US fixed income ETFs had net inflows of $1.9 billion, while international fixed income ETFs posted a more modest weekly net inflow of $144.1 million.
“The market is still elevated but some market observers have voiced concerns on bear signals such as high valuations, delays on promised tax cuts and the unpredictable black swans, as geopolitics, terrorism and uncertainty with Trumps policies,” says DBS.
However, DBS says a review of the key performance indices this week shows that “investors are still going for the ride before the worry warts and the bears take over.”
