ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Artificial Intelligence
      • Beyond Basic Beta
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Direct Indexing
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Investing
      • ETF Education
      • ETF Strategist
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Institutional Income Strategies
      • Leveraged & Inverse
      • Managed Futures
      • Market Insights
      • Modern Alpha
      • Multifactor
      • Responsible Investing
      • Retirement Income
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Commodities
        • Gold/Silver/Critical Minerals
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Core Equity Channel
  2. Volatility? Investors Will Increase ETF Allocations
Core Equity Channel
Share

Volatility? Investors Will Increase ETF Allocations

Aaron NeuwirthAug 21, 2019
2019-08-21

With volatility picking up in the markets in the past few weeks, many investors are discussing how to best invest in the late-stage market cycle.

On a Charles Schwab hosted media call on Friday, Heather Fischer, Vice President of Mutual Fund and ETF platforms, offered her thoughts on what investors have shared about their expectations for volatility, as well the impact it could have on the ETF industry.

Referencing Schwab’s annual investor survey that was released in May, Fischer explained how 61% of investors believed volatility would increase in the next six months. Additionally, 44% said they would put more money into ETFs as a result. So even before recent market moves, 51% of survey respondents said they increased allocation to ETFs in the past six months as a result of increased market volatility.

“In fact, among the investors that say they are expecting volatility, 73% expect to increase their ETF investments in the next year,” Fischer went on to say. “And 37% will consider placing their entire investment portfolio, excluding cash, into ETFs in the next year.”

Considering the reasons why, Fisher noted how they’ve continually found that ETFs serve as the foundation of a portfolio and as a vehicle that enables investors to be very flexible, which is critically important in times like this.

“ETFs are a tool that investors naturally turn to in these kinds of times,” she said.

How Schwab is Adapting To Volatility

When asked how recent volatility may have changed Schwab’s platform, Fischer was able to discuss recent fund flow data. Having looked at a comparison between two weeks’ flows, the week July 29th (relatively light on market changes) and the week of August 5th (considerably more reactive to volatility), some interesting analysis came to light.

Based on those periods, flows were up week over week, with one of the biggest jumps coming from US equities. Another major trend during market volatility was in commodities, which resulted in all positive flows.

There were some interesting differences during that week of substantial market volatility as well. The RIA client outpaced retail clients by quite a bit when it came to flows into US equity. The opposite was true for commodity ETF flows.

Related: More Volatility Ahead? Traders Are Betting On It

Regarding what kind of flows had gone into fixed-income ETFs over the past few months, Fischer made it clear there’s been quite a bit of a downturn in fixed-income ETFs over the past year. By the end of July 2018, it was up to nearly $8.8 billion in inflows on their platform. Through July 2019, their a little under with only $7.7 billion inflows.

It comes down to familiar trends when dealing with recent volatility. However, there is a larger appetite in fixed-income among RIA clients vs. retail clients, regardless of volatility. RIA flows accounted for more than half of all fixed-income flows during the relatively volatile week.

This article originally appeared on ETFTrends.com.


Content continues below advertisement

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X