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ETF Specialist

ETF Flows' Record Run Cut Short in February

Investors dialed up their allocations to U.S. stock ETFs, and ARK continued to ascend the ETF ranks.

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After a slow start in 2021, stocks found some pep in their step in February. The Morningstar Global Markets Index--a broad gauge of global equities--jumped 2.59% last month. Meanwhile, bonds continued to slide as rates ticked up and yield curves steepened. The Morningstar US Core Bond Index declined 1.71% as rising yields pushed bond prices lower.

Bond exchange-traded funds captured the majority of inflows for much of 2020, but more recently flows have favored stocks. Investors poured another $77.6 billion into equity ETFs in February 2021. That figure ranks second only to November 2020's record $88.1 billion inflow to equity ETFs. February flows into all ETFs totaled $88.9 billion and might have eclipsed November 2020's $91.4 billion record if it weren't for the fact that it's the shortest month of the year.

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Ben Johnson has a position in the following securities mentioned above: VOO, IJR. Find out about Morningstar’s editorial policies.