For the month of January 2022, the ETF flow breakdown was 55%-45% between equity and fixed income respectively. We have witnessed the rotation to value1 with specific sectors benefiting from it: bank, auto, energy. The Fed decision to raise rates as soon as March negatively impacted the tech Nasdaq. 4 or 5 hikes may be expected this year. It confirms its willingness to fight against inflation – with a 7% CPI lastly disclosed. On that end, ECB kept its rates unchanged – However, Christine Lagarde made a hawkish comment by saying that she does not rule out a rate hike.
Equity Indices: NDX: -8.52%, MSCI WORLD: -5.34%, SPX: -5.26%, SX5E -2.88%, MSCI CANADA: -34bps, Stoxx 600 Bank: +7.37% Bonds: German 10Y yield: +18.8bps, US10Y Yield: +26.7bps Crypto: BTC/USD: -17.04%, XET/USD: -27.32% Gold: -1.75%
From a regional perspective, US and International equity indices were sold, while European equity indices recorded a mixed activity except for specific exposure such as the Stoxx 600 bank sector. On the fixed income side, US and Euro bonds were in favour while Italian bonds were sold.
On Equity indices: US equities recorded a net negative activity with the S&P500, S&P500 ESG, NASDAQ 100, MSCI USA ESG. The MSCI WORLD and MSCI WORLD ESG as well as the MSCI ACWI were out of favour. On the other hand, the European STOXX 600 BANK was bought.
On the Fixed income, IBOXX USD TREASURIES, the MARKIT IBOXX EUROZONE 5-7 as well as the BLOOMBERG BARCLAYS STERLING GILTS were bought. On the other hand, selling activity was recorded on the BLOOMBERG BARCLAYS US GOVT INFLATION LINKED and the MARKIT IBOXX EUR LIQUID HIGH YIELD.