ETF Inflows Topped $60B in March, BlackRock Says

Investors poured $62.1 billion into exchange-traded funds last month, almost tripling February’s intake, as global economic uncertainty fueled purchases of safer fixed income products, BlackRock said in a report. 

Fixed income in March jumped to $38 billion, the biggest gain since October, while stock inflows almost tripled to $24.3 billion. For all of February, ETFs brought in $23.3 billion, according to BlackRock, whose iShares arm is the No. 1 ETF issuer. 

The March haul brings first-quarter net inflows to $148.5 billion. 

ETF investors remain in a defensive mode four months into the year, after stock markets’ 2022 battering. While inflation has slowed from historic levels, it’s still around 5%, more than double the 2% target of the U.S. Federal Reserve. At the same time, the Fed’s ratcheting of interest rates from near zero in early 2022 to about 5% currently has moderated enthusiasm for equities, as has a banking crisis that continues to stoke concerns about the health of the global financial industry. 

"There was a clear defensive shift in sector and commodity flows, including gold,” Karim Chedid, iShares’ EMEA head of investment strategy, said in an emailed comment.  

Despite the economy showing cautionary signals, stocks funds have largely outperformed bond ETFs so far this. The SPDR S&P 500 ETF Trust (SPY) has gained 7.6%, while the Vanguard Total Bond Market ETF (BND) has added 3.7%. Investors have largely missed out on that gain in equities: They have pulled $9.44 billion from SPY, while BND has taken in $4.18 billion in new funds so far this year. 

iShares itself brought in $18.8 billion in bond ETF flows in March, more than 60% of the total inflows to the industry, the firm said. Its iShares 7-10 Year Treasury Bond ETF (IEF) was the top asset-gathering bond ETF, adding $6.2 billion while the iShares 0-3 Month Treasury Bond ETF (SGOV) posted its largest monthly inflow on record, adding $2.2 billion. 

Gold boosted commodity inflows, BlackRock said. “Driven entirely by gold,” commodity inflows rose to $1.7 billion, the biggest gain since last April. 

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