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
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.
ETF winners in February
- Investment Grade Corporate: $2.9 billion
- Emerging Markets: $2.5 billion
- Gold: $1.7 billion
- iShares Midcap: $1.5 billion
- iShares Core S&P 500: $1.4 billion
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.