Investors embracing risk-aversion

Investors embracing risk-aversion

Investors embracing risk-aversion What have we learned about investments in the year so far? Now that two months are in the books, it appears clear that investors have chosen to embrace risk-aversion products.

In what appears to be a complete reversal of sentiment compared to the last several years, gold ETFs have taken centre stage while long-dated Treasury funds have also found favour.

For example, during last month, both the iShares Gold Trust and SPDR Gold Trust enjoyed combined inflows of $4.5 billion with gold pushing into bullish areas. The yellow metal has enjoyed a substantial climb of 21 per cent since the middle of December last year.

Meanwhile, the long-dated Treasury bond ETFs have managed to double the flows into gold. Investors have placed close to $9 billion into bond ETs with the likes of the iShares Core US Aggregate Bond, the iShares 20+ Year Treasury Bond and the iShares 3-7 Year Treasury Bond.

Following the same risk aversion pattern, there was high demand for defensive ETFs including the iShares MSCI USA Minimum Volatility and the utilities fund, the First Trust Utilities AlphaDex.

Elsewhere during the month of February, equity funds saw $12 billion in outflows; while for ETFs as a whole there were net inflows of $2.7 billion.