'Investment Sentiment Cools' Global ETF Investment Funds Plummet

April Investment Amount $27.4 Billion 'Down 76.7% MoM'

[Photo by AP Yonhap News]

[Asia Economy Reporter Park Byung-hee] It has been confirmed that the scale of investment funds flowing into exchange-traded funds (ETFs) sharply declined in April. Since ETFs track indices of markets or industries rather than specific stocks, this is interpreted as a sign that overall market investment sentiment is cooling down.

Major foreign media, citing statistics from BlackRock, the world's largest asset management company, reported on the 8th (local time) that the scale of investment funds flowing into ETFs and market-tracking financial products amounted to only $27.4 billion in April.

This marked a 76.7% plunge from $117.4 billion in March, recording the lowest level since the COVID-19 pandemic began in 2020.

In particular, investment funds in equity ETFs sharply decreased. The scale of investment funds in equity ETFs was $76.2 billion in March but dropped to $2.8 billion in April.

The ETF market froze as global stock markets collectively declined ahead of the Federal Reserve's big step (a 0.5 percentage point increase in the benchmark interest rate). The FTSE All-World Index fell 13.2% this year, with an 8.1% drop in April alone.

With the COVID-19 pandemic still ongoing, combined with adverse factors such as supply chain disruptions and the Ukraine war, concerns are growing that the global economy will experience stagflation as inflation soars and economic growth stalls.

By region, large-scale capital outflows occurred in the U.S. market. $25.6 billion flowed out of equity ETFs on the New York Stock Exchange. The three major U.S. equity ETFs?iShares Core S&P 500 ETF, SPDR S&P 500 ETF, and Vanguard S&P 500 ETF?each recorded net outflows of $10 billion to $12 billion in April alone. The Vanguard S&P 500 ETF saw an outflow of $10.2 billion, marking the largest outflow ever recorded among Vanguard ETFs.

Although funds also flowed out of European equity ETFs, the scale of outflows was much smaller compared to U.S. equity ETFs. Net inflows were recorded in ETFs related to developed markets overall, emerging markets, and Japan.

This content was produced with the assistance of AI translation services.