Investors Prefer International Stocks over US Equities
Moderate ETF inflows
Last week, ETF inflows moderated with the addition of $3.5 billion—almost half of the previous week’s inflows. September witnessed $30 billion worth of inflows, which took the year-to-date total to $332 billion. US fixed income continued to shine and collected $2.5 billion. In contrast, US equity (JPM) (BAC) witnessed net outflows of $2.5 billion, while international equity added the highest inflows worth $2.8 billion. It indicates investors’ preference for international equities over US stocks (MS) (GS).
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The iShares Core S&P 500 ETF (IVV), which witnessed net redemptions of $1.6 billion last week, was the top gainer with inflows of $793 million. The iShares NASDAQ Biotechnology ETF (IBB) raked in the second-highest inflows worth $578 million, while the Financial Select Sector SPDR Fund (XLF) added $527 million. After collecting $575 million last week, the SPDR Gold Trust (GLD) added $516 million even though gold prices are rising gradually.
The largest outflow was witnessed in the SPDR S&P 500 ETF Trust (SPY) (SPX-INDEX) with net redemptions of $5.2 billion. The Health Care Select Sector SPDR Fund (XLV) and the PowerShares QQQ Trust (QQQ) had outflows of $683 million and $643 million, respectively.
The US will release the balance of trade data for August and the ISM Manufacturing Index for September. The Eurozone’s August unemployment rate will be released this week. The unemployment rate in the Eurozone was 9.1% in July. Australia and India will decide on interest rate changes, while the European Central Bank’s non-monetary policy meeting will be held this week. Australia and Canada will announce their balance of trade data for August.