Treasury bond exchange-traded funds took four of the top five spots among all ETFs in investor inflows in January. It's the first time that's happened since 2003, and only the second time ever that Treasury bond ETFs have dominated ETF flows in a month.
The ETF data, provided to CNBC by XTF.com, shows just how fearful investors were in a January that was the worst for the markets since 2009. Only twice in the history of the ETF industry have four Treasury ETFs managed to make the top 10 ETFs in asset flows — August 2003 and September 2015 — let alone the top 5 for a 30-day period.
Nicholas Colas, chief market strategist at Convergex, said there are some similarities between now and August 2003, the last time this occurred, that are worth noting. was getting to the end of a rate cycle that had bottomed at a 1 percent rate. Ten-year Treasuries were in "hard rally mode" going from over 5 percent yields in August 2003 to 3.6 percent in September 2003. And stocks were in decline from April 2003 to a low in September 2003.
"Basically, a similar picture to now. Bonds working and stocks falling, " Colas said, though he added that a big difference is "a dovish Fed back in 2003 and a theoretically hawkish one now."
Colas added: "If that is a bit of an indictment regarding the Federal Reserve's desire to raise short rates and (presumably) see the rest of the yield curve follow, so be it."
In his month-end ETF review, released last Friday, the Convergex chief market strategist noted that the Fed Funds Futures now only see a 58 percent chance of one rate increase this year from the Fed; last month that number was 83 percent.
Colas said the January ETF data shows an almost "dollar-for-dollar swap" out of U.S. stocks (–$10.3 billion) and into U.S. fixed income (+$11.7 billion). "'In the doghouse' seems to fit the general state of affairs in global risk asset markets," Colas said.
To show just how sour investors were on stocks in January, flows into ETFs targeting energy stocks of $931 million were the highest of any U.S. stock sector, according XTF.com data.
The big shift into bonds makes sense among the short-term market volatility but is arguably even more notable for occurring at the outset of a rising rate environment. "Don't people know that interest rates are going up? Oh, wait. ..." Colas quipped.
Some other highlights from the Convergex and XTF.com analysis of ETF flows in January:
—Eric Rosenbaum, CNBC.com. Additional reporting by Diana Pryor, special to CNBC.com.