Investors Are Getting Rid of ETFs and Mutual Funds more Actively During the Current Bull Rally

A feature of the latest bull rally is that investors are getting rid of ETFs and mutual funds, which has not been seen during other bull markets.

Image source: Twitter @Schuldensuehner

Contents

The Outlook on the Market
Irrational Market

The Outlook on the Market

Outflows are being noticed also by dynamically controlled mutual funds and ETFs. Investment Business Institute’s analysis reveals over $17 billion a month in the last three months, quitting passive investments, something that has never occurred before.

A lot of passive capital frequently is equal in target-date funds. The stock market recovery may have pressured certain funds to sell those equities just to retain the target amount of their overall equity portfolio.

Trading Strategy

Source: The Tradable

The Federal Reserve's Activity of Buying Corporate Bonds Is Growing

The Federal government is ramping up economic stimulus while continuing to buy corporate bonds from the market.

Irrational Market

According to Holger Zschaepitz, it is a big paradox that ETF sales are increasing, instead of increasing purchases and portfolios on the contrary.

Monthly contributions from actively managed mutual funds were negative for several years and although passive fund contributions were positive, usually they were lower.

#ETF

Eseandre Mordi E-mail

Eseandre is a blockchain lover from Nigeria, who also likes music and protecting women's rights.