Industry Updates

Fixed income ETFs see outflows for first time in two months

Tom Eckett


Investors sold out of fixed income ETFs for the first time in eight weeks in the US, according to Bank of America Merrill Lynch Global Research, in a sign investors are becoming more bullish about the prospects for growth for the rest of 2019.

In the week ending 3 May, ETFs saw overall inflows of $1bn, driven entirely by equity ETF purchases with fixed income ETFs seeing withdrawals from BofAML clients.

The outflows in fixed income ETFs is another sign there are less jitters in the market from US investors. Central banks have taken their foot off the accelerator this year which has driven the strong performance across the majority of asset classes.

Along with outflows in fixed income last week, gold ETFs listed in North America have seen $733m outflows so far this year, according to World Gold Council, with global YTD flows remaining negative at -0.4%.

This is the first sign investors are rotating out of fixed income this year. The asset class has hit a number of milestones this year including ETPs braking through the $1trn assets under management barrier for the first time while two ETFs listed in Europe passed the $10bn AUM mark for the first time.

In particular, BofAML clients bought health care ETFs last week, following two weeks of outflows for the sector while energy ETFs were sold for the first time in eight weeks. This makes staples ETFs with the longest buying streak of six weeks.

Overall, BofAML clients were net sellers of single stocks but continued to purchase ETFs for the sixth straight week in row.


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