Cinthia Murphy, Managing Editor at ETF.com
March has proven quite the month for investors’ nerves, but rattled as they may be, they have largely held on to their ETF positions through the ups and downs.
Our last look at ETF asset flows shows that in a week like last week, when the S&P 500 both dipped to a three-year low and rallied more than 17% in a matter of days, U.S. equity ETFs saw net redemptions of only $261 million.
The Invesco QQQ Trust (QQQ) and the Vanguard S&P 500 ETF (VOO) actually saw massive net creations of $2.5 billion and $1.4 billion, respectively, last week. Aversion for market risk may not be as widespread as some think.
But perhaps the most interesting ETF story last week was the resurgence in demand of the iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD). The fund is the largest and most popular investment-grade corporate bond ETF on the market, with $36.5 billion in assets under management and daily trading volume exceeding $2.4 billion on average every day, trading at penny spreads.
Last week, as the Federal Reserve added plans to buy investment-grade corporate bonds as part of its latest intervention, LQD picked up $5.2 billion in net asset inflows. That’s a 15% jump in AUM for a fund that had been largely out of vogue as investors worried about the impact of the COVID-19 shutdown on companies’ bottom lines.
Top 10 Creations (All ETFs)
Top 10 Redemptions (All ETFs)
ETF Weekly Flows By Asset Class
The latest round of asset flows put year-to-date ETF net creations at $66.7 billion, ahead of last year’s pace this time of year. U.S. equity ETFs have dominated demand, taking in almost $40 billion of that total.
More on ETF.com
March Market Madness Unprecedented
Staying Ahead With Tail Risk ETF
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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March 31, 2020 at 01:39AM
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Demand For Investment Grade Corp Bond ETF Returns - Nasdaq
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