Investors piled into bond exchange-traded funds as equity markets posted losses on fears of sticky inflation.
U.S. equity ETFs shed $6.2 billion in the week ending Feb. 24 as recently released economic data indicated that the Federal Reserve may keep interest rates higher for longer than anticipated. Equity markets posted their third straight week of declines as the S&P 500 slumped 3.3% during the week, while the Nasdaq dipped 3.3%. That marks the worst performance for the indexes in over two months.
Funds that lost the most assets included the SPDR S&P 500 ETF Trust (SPY), the iShares Core S&P 500 ETF (IVV) and the Invesco QQQ Trust (QQQ). The three funds collectively bled $4.8 billion, according to ETF.com data. This is the fourth consecutive week of losses for SPY, the oldest and largest U.S.-listed ETF.
Meanwhile, U.S. fixed income ETFs brought in $4.1 billion compared with the $2.1 billion the asset class lost in the week ending Feb. 17. Investors seemed to largely embrace a risk-off approach, as six of the 10 top-performing ETFs of the week were Treasury bill related.
The three top-performing ETFs of the week were the iShares Short Treasury Bond ETF (SHV), the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) and the iShares 0-3 Month Treasury Bond ETF (SGOV), which hauled in nearly $6 billion, ETF.com data shows.
The inflows come as yield on short duration Treasury bills such as the one-, three- and six-month notes hit 4.6%, 4.8% and 5.1%, respectively. On Monday, the policy-sensitive two-year Treasury bill hit 4.8%, its highest level since 2007. Yields rise as prices fall.
For a full list of last week’s top inflows and outflows, see the tables below:
