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Trump election sparks record US equity inflows

Donald Trump’s election victory has triggered an almost unprecedented move into US equities. According to Lipper fund flows data, American investors funnelled a record net sum of $27bn to US equity ETFs during the seven days after the election.


PA Europe

Total net flows amounted to $23.7bn as actively managed US equity funds continued to see net outflows. This still is the third largest weekly net inflows figure since Lipper began tracking flows in 1992. The outflows from actively managed funds occurred despite a massive increase in sector dispersion since the election result, which is supposed to benefit active managers: as you can see in the chart below, financial services stocks are up more than 10% since the election, while consumer staples are down 4%.

Investors directed the bulk of the inflows to broad-market products tracking the S&P 500 and Russell 2000 indexes. However, the SPDR Financial Select Sector ETF was the third most popular product, welcoming $5.2bn in net new money.

Great Rotation

In a sign US investors believe domestic equities will profit disproportionately from Trump’s expected ‘America First’ approach, they sold off non-US equities, which in aggregate saw net outflows of $3.8bn.

American investors also seem to believe that Trump’s election has dealt the final blow to a decades-long bond bull market. As treasury yields spiked, investors sold off a net $17.4bn in US Treasury money market funds, and another net $8.7bn in other bond funds.