Flow & Tell with iShares | Oct 2021

ETF FLOWS IN OCTOBER: POSITIONING FOR YEAR-END

October ETF flows were the fourth-largest monthly haul on record at $79.1 billion, adding to the already record-breaking flows seen so far in 2021 totaling $720 billion.¹ Many of the standout flows over the month were the result of institutional rebalances, as professional investors position ETF portfolios for the rest of the year. Also in the spotlight were corporate earnings, which have revealed important insights into the state of the economic recovery, and the ongoing saga around supply chain disruptions.

THEMES OF THE MONTH

Model ETF portfolio rebalances focus on fallen angels.

Reflationary themes and the search for yield were top of mind as model ETF portfolio rebalances led to outsized flows during October for some ETFs.

Seeking granularity during earnings season.

Earnings season led to a sharp refocus on sector ETFs as investors turned their focus away from broader macro trends.

Positioning for supply chain disruptions.

With supply chain delays dominating headlines, investors favored sectors that tilt toward higher profit margins.

OCTOBER ETF FLOWS

October ETF heat map

October ETF flows compared with index performance

Source: BlackRock, Bloomberg, chart by iShares Investment Strategy. Universe includes all U.S.-domiciled ETFs. MTD ETF flows normalized defined as net inflows between October 01, 2021-November 01, 2021 divided by AUM as of October 01, 2021. Index performance is for illustrative purposes only. Index performance does not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. Index performance is measured by the following indices: High Yield Credit: iBoxx USD Liquid High Yield Index; Investment Grade Credit: iBoxx USD Liquid Investment Grade Index; Inflation: Bloomberg U.S. Treasury Inflation Notes TR Index; Consumer Staples: MSCI USA Consumer Staples Index; Financials: Dow Jones U.S. Financials Index; Real Estate: FTSE Nareit Equity REITs Total Return Index; Information Technology: MSCI USA Information Technology Index; Energy: Dow Jones U.S. Oil & Gas Total Return Index; Growth: Russell 1000 Growth Total Return Index; Value: Russell 1000 Value Total Return Index; Consumer Discretionary: MSCI USA Consumer Discretionary Index; U.S. Equity: S&P 500 Index; DM ex-U.S.: MSCI World ex-USA IMI USD Index; EM Equity: MSCI Emerging Markets IMI USD Index.

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¹ Source: BlackRock, Bloomberg. As of November 01, 2021.

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Originally Posted on November 8, 2021 – Flow & Tell with iShares | Oct 2021

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