Value trading has been revamped.
This year’s monster flows in exchange-traded funds — $219 billion in the first half of 2021 — show a broader preference for value-oriented plays, according to ETF Trends, chief investment officer and research director at ETF Trends and ETF Database. Dave Nadig told CNBC’s “ETF Edge” on Wednesday.
Data from ETF Trends shows that value funds saw net inflows of $53 billion in the first half of the year, while growth funds lost $331 million.
“I think the value is back,” Nadig said. “We see continued interest in things like dividend plays and I think that shows that investors are really looking for income.”
In particular, investors flock to fixed-income trades such as Treasury inflation-protected securities, or TIPS, amid concerns surrounding inflation, Nadig said.
He said money also flowed into municipal bond-based investments, which are exempt from federal income taxes and thus potentially useful at the end of the Biden administration’s first year in office.
“I think we’re seeing a lot of strategic uses of really interesting ETFs, but in the meantime … the flows are really unstoppable,” he said. “It’s been ‘Katie, bar the door’ for everyone. We’ve seen huge growth from retail investors, financial advisors and institutions.”