ETF Investors Buy The Market Dip

Cinthia Murphy, Managing Editor at

Markets may have been panicked in recent days in the face of a briefly inverted Treasury yield curve, but investors continued to add to ETFs. data shows that as the market sold off and volatility spiked, investors put almost $7 billion to work in ETFs last week, looking at the pullback in U.S. stocks as a buying opportunity. U.S. equity ETFs attracted nearly $5.5 billion in fresh net assets last week, even as the S&P 500 dropped to one-week lows.

All eyes have been on the Treasury yield curve, which briefly inverted last week (10-year dropped below two-year yields), fueling recession fears among investors. Everyone wants to know how low rates can go. Consider that while U.S. rates have dropped dramatically in recent days, a recent Bloomberg report showed that a record $15 trillion of global bonds have negative interest rates today, making the task of adjusting a fixed income allocation and finding income in bonds that much trickier.

Still, investors have been running into bond ETFs all year. Last week alone, U.S. fixed income ETFs took in $4.4 billion in fresh net assets as the 30-year Treasury bond yield tumbled to a record-low 1.91%.

Year to date, U.S. fixed income ETFs have taken in $76 billion in net assets—more than any other asset class this year—and more than 50% of all assets flowing into U.S.-listed ETFs in 2019.

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