ETF Flow Report

March 2022 Flow Report

Commentary from the Desk:

For the month of March 2022, the ETF flow breakdown was 60%-40% between equity and fixed income respectively. Investors must navigate in a complex environment. The recession risk needs to be considered. The long lasting geopolitical tension in Europe perpetuate high energy prices - which drove EU inflation to 7.5% in March and will continue to impact growth. To fight against inflation, the Fed is looking to raise rates by 50bps as well as reducing its balance sheet by more than $95bn per month. The US will also supply 1mn barrels a day during the next 6 months to replace Russian oil in an effort to maintain oil prices close to $100. European equities were more impacted than the US stocks. Gold touched a $2070 high in early March before cooling but continued trading above the $1900 level.

March Performance highlights

Equity Indices: STOXX 600 BANK: -3.22%, Eurostoxx 50: -0.55%, MSCI EUROPE: 0.42%, MSCI WORLD: +2.52%, SPX: +3.58%, NDX: +4.22%,

Bonds: German 10Y yield: +41.3bps, US10Y Yield: +51.3bps

Commodities: Gold: +1.49%, Oil: +6.85%, Wheat: +9.27%

From a regional perspective, Canadian and German equity indices recorded a small gains while US and European equity indices were sold. On the fixed income side, US bonds were in strong demand followed by European bonds.

More specifically,

On Equity indices: the STOXX EURO SELECT DIVIDEND was bought, while the MSCI EUROPE, MSCI EMU, MSCI EMU ESG and STOXX 600 EUROPE BANK were sold. The MSCI WORLD, the US tech NASDAQ and S&P500 recorded a mixed activity.
On the Fixed income: Mixed activity on US Treasuries 1-3Y and 3-7Y while the US 7-10Y Treasuries were bought. EURO AGG GOVIES were bought. Mixed activity on the BARCLAYS US INFLATION LINKED while the MARKIT IBOXX EURO INFLATION was sold.

Sources: Bloomberg RFQE, Tradeweb, DRW - March 2022

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