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Money is gushing into the market — and one part of it in particular


The money continues to flow into the markets, and into exchange-traded funds in particular.

January had roughly $35 billion in ETF inflows, and February also saw roughly $52 billion in inflows.

That's a two-month inflow of about $87 billion, and according to Dave Nadig, CEO of ETF.com, "It's the biggest two-month run in ETFs since ETFs were invented."

"We're in the middle of a rally," Nadig told me. "A lot of retail investors are coming back to the party. If you look at what's getting the assets, it's low-cost index product. It's large-cap equities, (emerging markets) across the board — but low-cost product that tends to be where retail investors go."

February flows were broad based, with the biggest inflows once again into U.S. equity funds.

February ETF flows

  • U.S. equities: $24 billion
  • Fixed income: $12 billion
  • International equity: $11 billion
  • Commodities: $2 billion
  • Other: $3 billion
  • Total $52 billion

    Source: ETF.com

These are good inflows — there are no monster winners, but money is flowing into almost all sectors, including large-cap, mid-cap and small-cap equity funds.

To give you an idea of how broad the inflows are, here are the ETFs with the largest inflows.

Kham | Reuters

ETF winners in February

Wow. I see corporate bonds, emerging markets, gold, midcap, and the S&P 500. It doesn't get any broader than that for inflows!

And the Trump trade? There's still evidence money is flowing into sectors associated with that trade.

Trump trades (February ETF flows)

  • Financials: $1.8 billion inflow
  • Health Care: $1.5 billion inflow
  • Canada: $205 million outflow
  • Mexico: $235 million outflow

Bottom line, according to Nadig: At this rate, we are on track for ETF inflows of $500 billion in 2017. That would be a 20 percent rise in assets over the roughly $2.5 trillion currently in U.S.-based ETFs.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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