The Second Dumbest Kind Of Money Is Pouring Into Stocks – ‘With A Vengeance’

One of the traditional signs of market tops is individual investors finally succumbing to the lure of apparently easy money and pouring their savings into the stock market. In the past this dumb money flowed into equity mutual funds in general. But today it’s favoring exchange traded funds (ETFs) that, rather than trying to pick winners, simply offer exposure to sectors or broad market indexes.
ETFs Race to Fastest Yearly Start Ever Based on Inflows (Wall Street Journal) – Investors poured $62.9 billion into exchange-traded funds in February, pushing the year-to-date world-wide tally to $124 billion, the fastest start of any year in the history of the ETF industry, according to data from BlackRock Inc. U. S. ETFs accounted for $44 billion of that, pushing assets in U. S. funds to almost $2.8 trillion.
Most of the money went to cheap, index-tracking ETFs, a sign that the price war in ETFs isn’t over yet. BlackRock’s iShares ETFs were the biggest winner, and its low-cost Core series garnered the bulk of the $38 billion global haul.
‘All of the money is going into the cheapest and most boring ETFs. This is the retail investor getting back into the market with a vengeance,’ said Dave Nadig, chief executive of ETF.com, an industry website owned by Bats Global Markets, newly a subsidiary of CBOE Holdings Inc.

This post was published at DollarCollapse on MARCH 5, 2017.