Rate Fear Is the Invisible Hand Behind ETF Flows

The video discusses ETF outflows, focusing on the underlying fear rather than volatility. Eric Balchunas from Bloomberg Intelligence explains how fixed income ETFs saw significant movements, with shifts from corporates to Treasurys and high yield to investment grade. The video also highlights the impact of rising rates on ETFs like LQD and SHV. In the equity sector, REITs experienced notable outflows, continuing a trend from January. The discussion emphasizes the influence of interest rates on ETF flows and the broader market.

What was identified as the primary driver behind most ETF flows, according to Eric Balchunas?

• Jobs report with higher wages

• Operational flows and traders

• Rising interest rates

• Short Volatility ETFs

In February, what significant shift occurred in the fixed income ETF market?

• Increase in short Volatility ETFs

• Shift from corporate to Treasury bonds

• Decrease in investment grade bonds

• Rise in high yield debt

Which ETF is highlighted as being sensitive to interest rate changes due to its long duration?

• LQD

• HYG

• SHV

• SPY

What was a notable trend in the equity sector ETF flows?

• Growth in financial sector ETFs

• Outflows in REITs and utilities

• Increase in technology sector ETFs

• Stability in materials sector

Why are REIT ETFs considered larger than they should be, according to the discussion?

• They are less sensitive to interest rate changes

• They are heavily traded by speculators

• They yield 6% in a low-yield environment

• They have high volatility