One Look at Passive Flows Explains the Story of Markets in 2019
- ETF investors favor defensive strategies like low volatility
- Inflows and outflows have closely matched market direction
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To understand market psychology these days, just follow the money.
The $119 billion that’s flowed into exchange-traded funds this year shows investors clinging onto the longest bull market that ever was, even as angst builds that all good things must come to an end. Record appetite for fixed-income funds has coupled with a bid for safety in equities, with investors seeking to sidestep pain from geopolitical risk and slower growth, while pursuing further gains.