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