COVID-19 Hasn't Killed ETF Inflows Yet, But ...
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Thursday, April 02, 2020

COVID-19 Hasn't Killed ETF Inflows Yet, But ...

The ETF side of the mutual fund industry did not swing to outflows last month, even as the coronavirus crisis roiled global markets. Yet a lot of ETFs disappeared.

Mohit Bajaj
WallaceBeth Capital
Director, ETF Trading Solutions
ETFs in the U.S. still managed to bring in $176 million in net inflows in March, reports. Combine that with January and February, and Q1 2020 still saw $71.9 billion in net ETFs inflows, up 50.4 percent from Q1 2019.

Despite that, Q1 2020 also saw 72 ETFs shut down, more than any quarter since Q3 2017, Bloomberg reports. Citing WallaceBeth Capital, the report describes "a reckoning for the myriad niche funds populating the nearly $4 trillion ETF market."

"With huge market movements, investors are going to flock to broad-based funds to hedge out risk, rather than smaller niche products," Mohit Bajaj, director of ETFs at WallaceBeth, tells the publication. "It was hard enough when the market was at its peak to get market share, even harder when the S&P is down over 20%."

So, perhaps the rise of ETFs is continuing, but only as it gets more concentrated.

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