Stocks have two big tailwinds pushing them higher

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Traders on the NYSE, May 3, 2021.

Source: NYSE

It’s not just about earnings anymore: Dividends and heavy buying of exchange-traded funds are helping stocks power forward.

April trading data is in, and it shows two surprises: an increase in dividends and huge inflows into equities that are even stronger than the first three months of the year.

Dividends are back

Investors enthusiastic: Big rush to ETFs continues

Near-record inflows into ESG, thematic tech and other areas are also supporting prices.

ETFs started the year just short of $6 trillion in assets under management, and inflows have continued on a consistent basis every month in 2021.

According to ETF Trends, investors spent an extra $55 billion on equity-based ETFs in April, for a year-to-date total of $258 billion. 2021 will certainly see much higher equity inflows than 2020, when panicked investors threw money into bond funds.

“The money’s coming from everywhere,” said Harry Whitton, senior vice president at Old Mission, an ETF market maker. “There are people still sitting at home who are putting money into the markets. You are seeing huge interest in [Environmental, Social and Governance] ETFs. You are continuing to see money come out of mutual funds and into ETFs as well.”

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