As of May 31, 2019 it is clear that certain equity investors are getting more defensive into the summer. This of course can change on a dime on a catalyst if there is positive news about China. Nevertheless, we are due for some volatility.
– US-listed ETFs experienced net outflows of $14.4B, the largest monthly outflow in five years
– Risk-off positioning led to investors to rotate over $20B out of equity focused ETFs during May
– Despite broader equity outflows, factor ETFs had $5.5B in inflows, led by low volatility ETFs
– Fixed income ETFs led asset class inflows, netting $6.9B in the strongest inflow month of Q2
– Preferred & municipal bond ETFs continued to attract new assets as investors positioned further out on credit curve
– High yield ETFs, including both corporate & senior loans ETFs, lost $3.4B in the largest selloff since December ‘18
Source: Bloomberg L.P., as of May 31, 2019
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