ETF Snapshot: Flows Into US Large-cap ETFs Reach Fresh High
US large cap ETFs saw record inflows in the week ending 26 January as investor bullishness on President Donald Trump's tax reform reached peak levels.
US large caps saw inflows of €12bn, the most on record, building on the €7.9bn and €7.4bn inflows seen in each of the previous two weeks respectively, according to data from TrackInsight.
The Tax Cuts and Jobs Act, which has seen corporation tax cut from 35% to 21%, boosted equity markets to their best start to a year since 1987 with the S&P 500 rising 5.9% to 2,853 points, before a wobble in the bond market caused equities to sell-off last Monday.
Elsewhere, small caps saw inflows of €2.2bn after being the only asset class in the red the previous week with outflows of €461m on the back of some underperformance in the smaller cap space versus large caps.
European large caps also witnessed inflows of €666m, despite Chancellor Angela Merkel admitting to not knowing when coalition talks with the SPD will end, while global ETFs saw inflows of €542m.
In emerging markets, all asset classes were in the black with Asian large caps and emerging stocks recording inflows of €90m and €2.9bn respectively, while emerging bonds saw €387m inflows.
Across the rest of the fixed income market, developed high yield bond ETFs was the only asset class to record negative flows with outflows of €2.3bn, while developed investment grade bond ETFs and developed government bond ETFs posted inflows of €442m and €208m respectively.
TrackInsight's data covers both US and European-listed ETFs that in combination make up around 70% of the total market.
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