Global infrastructure and China high on investors' radar  

The theme ‘Global Infrastructure’ proved to be popular with investors last week, driven by the U.S. Administration announcing the allocation of funds to infrastructure projects. The theme netted USD$629 million. Meanwhile, ‘China Digitalization’, the second most appealing theme, pulled in USD$524 million of investors’ capital over hopes of a long-awaited rebound and positive earnings expectations. 

White House announcement drives investors into Infrastructure ETFs 

Investors poured their money into Infrastructure ETFs last week, making  ‘Global Infrastructure’ the theme of choice. It lured USD$629 million of new capital driven by a significant cash influx into the iShares U.S. Infrastructure ETF (XNYS:IFRA). In fact, XNYS:IFRA pulled in the most assets across the entire universe of Thematic ETFs, netting USD$658 million in inflows. Investors were driven by recent announcements from the White House declaring that USD$110 billion had been assigned to fund 4300 infrastructure projects. This came six months after President Biden signed the USD$1 trillion infrastructure bill on November 15th. The funds are intended to fix deteriorating roads, improve the electrical grid, and expand broadband internet across the nation. Mitch Landrieu, White House senior advisor and former mayor of New Orleans, said that the projects would lay the foundation for tremendous growth in the future. 

‘Global Infrastructure’ and ‘Energy Infrastructure’ are the only two themes following the ‘Infrastructure’ trend. ‘Energy Infrastructure’ did not see any cash influx last week; in fact, ETFs under this theme shed USD$28 million of assets. As a result, ‘Infrastructure’, the trend, netted USD$601 million in inflows and booked a slot on the top receivers list to become the third most attractive trend.

ETFs in play:

• Infrastructure ETFs
• Energy Infrastructure ETFs
• Global Infrastructure ETFs

Investors rushed into Chinese tech over hopes of a well-awaited rebound 

The USD$6.2 billion KraneShares CSI China Internet ETF (ARCX:KWEB) was still trading in the red, having lost 24.89% year-to-date. Yet, it still managed to pull in USD$529 million for the week ending May 20th despite feeling the weight of supply chain issues, slower growth outlook, and COVID-19 lockdowns. Investors rushed to buy Chinese tech in hopes of a comeback after a massive sell-off year-to-date. Furthermore, investors were keeping an eye on earnings reports for some of the biggest companies tracked by the ETF, such as Alibaba Group Holding Ltd and Baidu Inc. As such, the ‘Emerging Markets Awakening’ trend led the top receivers in terms of highest weekly inflows. The trend secured USD$524 million in net inflows, mostly from investments in the ‘China Digitalization’ theme, which netted USD$537 million. Additional themes such as ‘China Disruptive Technology’ and ‘Sustainable Development Projects’ managed to attract USD$9 million and USD$0.8 million, respectively. Others capturing the ‘Emerging Markets Awakening’ investment opportunity failed to attract investors, with net outflows totaling USD$8 million last week. 

ETFs in play:

• China Consumer Growth ETFs
• China Digitalization ETFs
• China Disruptive Technology ETFs
• China Life Sciences ETFs
• China New Economy
• Emerging Markets Awakening
• Emerging Markets Consumer Growth
• Emerging Markets Digitalization
• Emerging Markets Disruptive Technology
• Emerging Markets Future Mobility
• Emerging Markets Infrastructure
• Sustainable Development Projects

Data for this article is as of May 20th, 2022.