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ETFs Start 2018 on a Very Strong Note

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US fixed income on top

ETFs started 2018 on a very promising note. According to FactSet, the total ETF inflows amounted to $5.32 billion for the first week of the year. The surprising feature of last week’s inflow was that US equity wasn’t the most popular asset class—unlike the past year. It only added $138.9 million despite the markets trending higher. The first rank has been bestowed on US fixed income with inflows worth $2.95 billion. International equity followed next with an addition of $2.53 billion, while international fixed income had $871.3 million. Commodities saw outflows of $213.2 million.

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IVV shines

The iShares Core S&P 500 ETF (IVV), which was the biggest gainer last year, garnered the highest inflows of $1.1 billion. The other major gainers included the iShares Core U.S. Aggregate Bond ETF (AGG), the Industrial Select Sector SPDR Fund (XLI), and the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) with inflows of $861.7 million, $817.5 million and $807.9 million, respectively.

SPY tops the outflows

The SPDR S&P 500 ETF Trust (SPY) saw redemptions worth $3.2 billion. Other notable ETFs that witnessed substantial outflows are the iShares Russell 2000 ETF (IWM) and the PowerShares QQQ Trust (QQQ) with net redemptions of $1.68 billion and $1.08 billion, respectively.

Upcoming events

The US will report the inflation rate and retail sales for December. In November, US consumer price inflation rose to 2.2% year-over-year. China will release the balance of trade data for December, while Germany and the United Kingdom will release the same data for November. China will also release the inflation rate for December. The Eurozone will report its business climate indicator for December.

JPMorgan Chase (JPM), Wells Fargo (WFC), PNC Financial (PNC), and BlackRock (BLK) will report their fourth-quarter earnings on January 12 as the earnings season gets underway.

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