Investors Pumped $13B Into ETFs After Fed Meeting

SPY, VOO, RSP and IWM were among the big winners.

sumit
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Senior ETF Analyst
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Reviewed by: etf.com Staff
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Edited by: Mark Nacinovich

Financial assets surged across the board following a surprisingly dovish conclusion to the Federal Reserve’s two-day meeting last week. 

Fed officials signaled that rates are done going up and that they may cut them by 75 basis points next year. 

In the full trading day following the Fed's meeting, investors pumped $13 billion into U.S.-listed ETFs, according to data from Bloomberg.  
 
That includes $2.7 billion into the SPDR S&P 500 ETF Trust (SPY) and $2 billion into the Vanguard S&P 500 ETF (VOO). On Thursday, the S&P 500 closed at about 4,720, a mere 1.6% below its record high from two years ago. 

The Invesco S&P 500 Equal Weight ETF (RSP) and the iShares Russell 2000 ETF (IWM) were also in demand, with daily inflows of more than $1 billion each. Many investors expect the stock market rally to broaden now that interest rates are headed lower. 

Up until recently, a handful of mega-cap tech stocks were responsible for the bulk of the stock market’s gain for the year.  

RSP and IWM jumped 3.5% and 6.2%, respectively, between Wednesday and Thursday, much better than the 1.7% return for the S&P 500.  

Fixed-Income ETF Inflows  

Though the majority of the buying in ETFs was focused on stocks, investors still added a decent chunk of change to fixed-income ETFs on Thursday.  

Some $3 billion went into fixed-income ETFs collectively, including $1.3 billion into the iShares 20+ Year Treasury Bond ETF (TLT)

The yield on the 30-year Treasury bond neared 4% this week, down significantly from the 16-year high of 5.1% reached in October. 

Junk bond ETFs like the iShares iBoxx $ High Yield Corporate Bond ETF (HYG), the Xtrackers USD High Yield BB-B ex Financials ETF (BHYB) and the SPDR Bloomberg High Yield Bond ETF (JNK) were also popular, with daily inflows of between $300 million and $450 million.  

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.