Technology ETFs, the darlings of investors for large parts of 2017, have suffered a setback as a result of a rotation into financials. However, the sell-off is likely to be temporary and mark an attractive entry point into the sector.
Moody’s has published a report forecasting that passive funds will surpass 50% of the investment market in the US by 2024 at the latest, given the growth trends in this area of the market and the outflows from active funds. The agency foresees a similar growth pattern in other areas of the world, too, albeit from a lower starting point.
There was a clear increase in investor confidence in December, with money flowing into European, global and US equity ETFs, while emerging market equities suffered outflows on the back of worries about a potential negative impact of Donald Trump’s presidency.
Investors have been taking money out of fixed income ETFs and investing in equity funds at the strongest pace in 11 months, after Donald Trump’s victory in the US Presidential Election boosted investor confidence.