Investors are exiting defensive trades like utilities, min vol and consumer staples as VIX drops to record low. Yet these asset classes are still producing healthy returns.
Emerging market equity and commodity ETPs saw inflows following the Federal Reserve’s decision last week to raise interest rates once again, despite these areas of the market being traditionally considered interest rate sensitive and often suffering redemptions around rate hikes.
The monthly overview of the European-domiciled ETP industry has shown investors have become bullish on markets, with continued inflows into equities in favour of fixed income. Overall, European-listed funds have seen the strongest monthly inflows since August 2015.
Investors have been taking money out of safe-haven gold assets as they react positively to the election of Donald Trump as US President earlier this month, but ETF Securities is predicting a rebound in the price of the precious metal as political uncertainty continues to hit sentiment.
Gold ETPs took in a lot of money in the run-up to the US Presidential election, but investors appear to be less worried about the future of stock markets and have taken money out of gold once again. What is the future for the gold price with the current economic backdrop?