Exchange-traded fund investors are putting money to work amid recent market volatility, ETF Trends’ Dave Nadig said.
The SPDR S&P 500 ETF (SPY) has seen four to five times its daily average volumes during the market’s wild swings, and some investors are using it to their advantage, the firm’s chief investment officer and director of research told CNBC’s “ETF Edge” on Wednesday.
“Over the last five sessions, we’ve actually had about [$]13 billion flow into equities,” Nadig said. “ETF investors are definitely buying the dip here.”
U.S. equities, particularly SPY and Invesco’s QQQ Trust (QQQ), have captured the bulk of the volume, he added.
“We’ve had a few days of outflows there, but the trend has very much been strongly buying the dip putting money back to work,” Nadig said.
Actively managed ETFs could offer investors the “best of both worlds” in frothy environments like this, Bryon Lake, global head of ETF solutions at J.P. Morgan Asset Management, said in the same interview.
“You get the benefits of the ETF wrapper — trades throughout the day, tax efficient, transparent — with the intentional outcomes that active management can provide,” Lake said.
J.P. Morgan has put that strategy to work with its Ultra-Short Income ETF (JPST), the largest actively managed ETF in the country with more than $18.4 billion in assets.
Lake also highlighted J.P. Morgan’s new Climate Change Solutions ETF (TEMP), which is the first active play on sustainable climate change solutions.
“We’re really excited about our latest launch,” he said. “We think that’s a big deal and investors are looking for that to incorporate into their portfolios.”
TEMP is down nearly 11% since its December launch.
