[02/06/24] ETF Inflows Hit $30B in Strong January

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WEEKLY ROUNDUP OF ETF FILINGS, LAUNCHES & CLOSURES

Investors are feeling upbeat, and history suggests that early markets’ momentum will continue during the year.

The year began promisingly for ETFs with inflows totaling nearly $30 billion in January, the upturn part of a wider market surge fueled by optimism that the U.S. economy is landing gently and that the central bank can soon begin cutting interest rates.

Inflows to iShares Core S&P 500 ETF (IVV), Vanguard 500 Index Fund (VOO) and Invesco QQQ Trust (QQQ) ranged from $6 billion to $12 billion during the month, as etf.com reported. Over the same period, the S&P 500 climbed almost 5% to an all-time high of 4,927(a mark that it eclipsed on Feb. 2 before sagging slightly).

More importantly, strong starts have generally foreshadowed strong years. In their weekly note to investors, JPMorgan Wealth Management strategists wrote that “going back to 1950, years with a positive January usually see rallies of almost 17% and end with a gain nearly 90% of the time.”

“When January is negative, the results are much worse,” the strategists wrote. “In that scenario, the S&P 500 has seen an average full year decline of about 2% and has been positive only 50% of the time.”

To be sure, the note added that January’s performance had continued momentum from the fall when price data and other indicators seemed to affirm the economy’s encouraging path forward. And the SPDR S&P 500 ETF Trust (SPY) shed a whopping $27.4 billion during January, even if that followed 2023’s huge inflows.

Still, investors are feeling more buoyant. “No analog is perfect, and markets aren’t dictated by averages, but these observations suggest that investors haven’t missed the rally,” the JPMorgan strategists wrote.

By James Rubin

Below is a roundup of the key developments in the ETF industry during the week ending Feb. 2, 2024:  

ETF Inflows Hit $30B in Solid January Flows of $17.4 billion for fixed income ETFs were particularly strong during the month.

Regional Bank ETFs Hurt by NYCB Troubles Analysts debate whether regional banks face another round of failures.

SPY, RSP: Is the Equal Weight ETF Party Over? Equal weighted ETFs face a long, uphill climb.

Crypto, Nasdaq 100 Power ETF of the Year Finalists See details on how a diverse set of five funds made the final cut for ETF of the Year.

Spot Bitcoin ETF Race Narrows to IBIT vs. FBTC Funds from BlackRock and Fidelity—the biggest issuers—separate from the pack.

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