ETF FLow Report

February 2022 Flow Report

Commentary from the Desk:

For the month of February 2022, the ETF flow breakdown was 30%-70% between equity and fixed income respectively. The conflict between Russia and Ukraine - from tension to invasion - is dragging commodities prices higher. The barrel now trades above $100 and wheat gained 41% since mid February. Inflation is under pressure and central banks will have to act cautiously. Safe-haven assets are in demand. Gold crossed above $1900 and the German 10Y yield declined in to negative territory. The Fed’s plan remains extant – the rate raise is due on the 15-16 of March.

February Performance highlights

Equity Indices: STOXX 600 BAMK: -9.30%, NDX: -4.64%, MSCI EUROPE: -3.15%, MSCI WORLD: -2.65%, SPX: -3.14%,

Bonds: German 10Y yield: +12.4bps, US10Y Yield: +4.83bps

Commodities: Gold: +14.245%, Oil: +10.72%, Wheat: +21.89%

From a regional perspective, UK, Japan, emerging equity indices were bought, while International DM, US and European equity indices were sold. On the fixed income side, Euro and US bonds were in demand as well as inflation linked indices.

More specifically,

On Equity indices: the value1 related FTSE100 and STOXX 600 BANK were bought, while the MSCI EUROPE was out of favour. The US tech, NASDAQ and S&P500 recorded a mixed activity. The MSCI WORLD was sold while the MSCI EMERGING was bought.
On the Fixed income: EURO GOVIES and US TREASURIES recorded a net buying activity across the curve: 1-3Y, 3-7Y, 7-10Y, 20+Y. The MARKIT EURO BREAKEVEN INFLATION and the BLOOMBERG BARCLAYS US GOVT INFLATION LINKED recorded a mixed activity.

Sources: Bloomberg RFQE, Tradeweb, DRW - February 2022

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