A month after March set a five-year high for monthly inflows into overseas equity ETFs—at $22 billion—the April level of flows into overseas equities ETFs broke that record, with $25 billion in net flows into international equity ETFs.
The month-over-month record leapfrogging means the message is not new, but it’s a sign that instead of leveling off, the trend among investors bailing on U.S. equities for more international exposure has accelerated.
The $16 billion fear signal
Investors pulled a net $16 billion from U.S. equity ETFs in April, according to monthly data from FactSet. The list of the biggest ETF losers in April flows runs the gamut of U.S. equity buckets: small-cap, large-cap, financials, technology, real estate, health care, utilities. But the biggest flow loser of all was the proxy for the U.S. market—the SPDR S&P 500 ETF (SPY)—which saw negative $13 billion in flows.
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The only bright spots in April for U.S. stocks were mid-cap and energy, which were No. 5 and No. 6 in April flows among ETF asset classes—energy being no surprise with the big crude-oil price rally.
Stacey Brorup, of FactSet’s ETF research team, said the most notable positive turn for the U.S. was in the fixed-income market. March had seen net outflows of $900 million, while April saw inflows of around $3.56 billion. “That’s a big reversal in investor sentiment,” she said.