The report says that the US equity funds have performed a U-turn on its 2 weeks of modest outflows by facing $2.6bn in inflows. This is in contrast with Europe which faced flows of -$1.3bn, the tenth consecutive week of outflow as the market remains relatively volatile. Asia hasn't been so active in the equity markets either with China having inflows of only $0.7bn and Japan saw no inflows at all, says the bank.
Source: Deutsche Bank Research
Equity has been a key driver in the recent ETF inflows despite the recent bear-run says Deutsche Bank. Whilst the European markets has caused some spikes in the inflow of fixed income ETFs, equity has maintained a steadier inflow, dominated primarily by the US market.
There are several reasons why investors are shifting focus on to equity ETFs. Pseudo-futures, asset allocation and sector have all seen a significant increase over the past couple of weeks with asset allocation being the most consistently high over this time period.
The report also says that single-stock shorts were included in the major selloff throughout October. In contrast, ETF shorts have received noteworthy attention as managers increase their beta hedging.