BofA reports inflows into global stocks are on a record-setting pace — and ETFs may be a way to play the hot trade

Finance

In this article

There’s a corner of the market gaining traction among ETF investors, according to The ETF Store’s Nate Geraci.

The firm’s president finds international ETFs are experiencing stronger inflows.

“There is a little bit of performance chasing going on here, because broad international stocks have fairly significantly outperformed U.S. stocks since about the beginning of the fourth quarter of last year,” he told CNBC’s “ETF Edge” this week. “Investors are looking at that performance and perhaps reallocating there.”

BofA Global Research’s latest market data out late this week appears to support Geraci’s thesis. It shows emerging markets are seeing strong inflows so far this year.

According to the firm, inflows into emerging-market equities are clipping along at $152.3 billion on an annualized basis. This would mark the group’s largest ever inflows if the pace continues.

Geraci believes a weakening U.S. dollar due to a potential pivot away from interest rate hikes by the Federal Reserve is partially responsible for the shift. The U.S. Dollar Currency Index is down almost 1% year to date.

Valuations of overseas companies may also be more attracting investors, he added.

And, there may be even more growth ahead.

D.J. Tierney of Schwab Asset Management contends retail investors don’t own enough global stocks. He suggests the upside will continue into the second quarter, which starts Monday.

“Rebalancing [to international stocks] to get some more exposure could make sense for a lot of investors,” said the senior investment portfolio strategist.

His firm’s Schwab International Equity ETF, which tracks large- and mid-cap companies in over 20 developed global markets, is up 8.1% so far this year.

Disclaimer

Products You May Like

Articles You May Like

Making a plan to pay for long-term care: Insurance and other alternatives
FDA approves GSK’s RSV vaccine for high-risk adults ages 50 to 59, expanding shot’s reach
Broadcom beats earnings estimates, announces 10-for-1 stock split
Opinion: The elements for a big stock market drop are aligning. Here’s why investors shouldn’t panic
Fintech has hit a bottom after plunge in valuations and squeeze on funding, execs and VCs say

Leave a Reply

Your email address will not be published. Required fields are marked *