US Bond Funds Continue to Haul in Cash

U.S. fixed income exchange-traded funds remained a favorite as investors braced themselves for the onslaught of economic data in the weeks ahead that will indicate the Federal Reserve’s path forward.  

U.S. bond ETFs hauled in $9.7 billion in the truncated trading week ending April 6, according to etf.com data. That’s 33.8% greater than the $7.3 million the asset class pulled in the week prior.  

Funds with the greatest inflows included the iShares iBoxx USD High Yield Corporate Bond ETF (HYG) and the iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD), which collectively pulled in more than $2.1 billion last week. Year to date, both funds have shed billions despite their yields ticking up.  

On the other side of the ledger, U.S. equity funds picked up $623 million, rebounding from the nearly $1.2 billion of losses stock ETFs posted the week prior. Top-performing funds included the Xtrackers MSCI USA Climate Action Equity ETF (USCA) and the Invesco QQQ Trust (QQQ), which together collected $3.7 billion in the last week, etf.com data shows.  

The $11.2 billion in weekly inflows come as investors have kept a keen eye on the path of the Fed in the months ahead. On Friday, data released by the Bureau of Labor Statistics showed that U.S. employers added 236,000 jobs in March. That’s below economist expectations and may indicate that the labor market, which is a key factor in the Fed’s decisions, is finally responding to the central bank’s campaign to ease inflation.  

This upcoming Wednesday, the all-important consumer price index will be reported. MarketWatch-polled analysts are predicting that March inflation will come in at a 5.5% annual rate, easing from February’s reported 6%. Still, that’s a long way from the 2% the Fed has tried to get back to with nine straight interest rate hikes.  

Investors have responded to the murky expectations by flocking to fixed income ETFs for safety. U.S. bond funds lured in nearly $54 billion so far this year, according to etf.com data. Most of that went into Treasury bill ETFs, the data shows.  

For a full list of last week’s top inflows and outflows, see the tables below:          

Top 10 Creations (All ETFs)

Top 10 Redemptions (All ETFs)

ETF Weekly Flows By Asset Class

Asset Classes (Year-to-Date)

Top 10 Weekly Performers, Excluding Leverage/Inverse Funds and <1,000 Shares Traded

Top 10 YTD Performers

Disclaimer: All data as of 6 a.m. Eastern time the date the article is published. Data is believed to be accurate; however, transient market data is often subject to subsequent revision and correction by the exchanges.