Stock ETFs Attract Record Inflows in November

Equity exchange traded funds enjoyed robust inflows over November, overtaking the fixed-income side in new creations for the year, as investors chased after the stock market rally. Fixed-income ETFs initially saw huge inflows in 2020, outpacing investments into the equity ETF side after the coronavirus-induced sell-off caused many to shift into the relative safety of bonds. However, equity-based ETFs brought in a record $81 billion in net inflows over November, bringing the total for the year to $196 billion, Bloomberg reports. In comparison, fixed-income ETFs only saw $17 billion in inflows over November to total $192 billion for the year. After news broke of a potential Covid-19 vaccine and the post-election results helped assuage political fears, investors shifted back into riskier stock assets, with the most beaten-down segments of the market, such as small-caps and energy stocks, benefiting the most. Meanwhile, global equities also enjoyed their largest monthly gain since at least 1988, and multiple major benchmarks are trading at or near all-time highs. “The prospect of multiple Covid-19 vaccines on the horizon, combined with diminished uncertainty over the presidential transition, boosted investor appetite for stocks. Equity ETFs reflected that,” Nate Geraci, president of investment-advisory firm the ETF Store, told Bloomberg. “Given that November was a historic month for stocks and with some investors questioning the risk/reward profile of bonds, it’s no surprise to see equity ETF inflows surpass bond ETFs.”