Exchange-traded funds have started flowing in Monthly record set in 2024managers believe that a boom in money market funds before the end of the year may have an impact on capital inflows.
Nate Geraci, president of The ETF Store, said in an interview with CNBC: “Given that more than $6 trillion is parked in money market funds, I do think this is indeed the biggest variable for the rest of the year. “ETF Edge” this week. “Whether it’s flows into REIT ETFs or just the broader ETF market, this is going to be a real potential catalyst to watch.
Total assets of money market funds hit a new high of $6.24 trillion last week investment company association. Assets take a hit peaked this year Investors are waiting for the Federal Reserve to cut interest rates.
“If yields fall, money market fund returns will fall as well,” Matt Bartolini of State Street Global Advisors said in the same interview. “So as interest rates come down, we would expect to see Some of the capital that had been sitting on the sidelines when cash cooled off again is starting to come back into the market.”
Bartolini, head of the firm’s SPDR Americas Research, believes money will flow into stocks, other high-yield areas of the fixed-income market and parts of the ETF market.
“I think one of the areas that I think could potentially improve is gold ETFs,” Bartolini added. “They’ve had about $2.2 billion in inflows over the past three months, which is very strong compared to last year. So I think the future is still bright for the industry as a whole.
At the same time, Geraci expects large-cap ETFs to benefit. He also believes this shift could be promising for ETF inflow levels as they Set to hit record $909 billion by 2021.
“Assuming the stock market doesn’t experience a major correction, I think investors will continue to allocate here and ETF inflows could break this record,” he said.
