You can never really be sure why a mutual fund or an ETF sees large inflows or outflows. Some people think it shows where the “smart money” is headed. Others think it is a contrarian indicator because there is no such thing as “smart money.” I think you have to take each situation individually and see if the moves are the result of things happening in the financial markets, the economy and the global news.
A great example is when there’s unrest in the Middle East. Everyone rushes out of stocks in that region. That’s just fear at work, because things always settle down, and the stocks rise again. Right now, for example, I’d look carefully at Israeli stocks and ETFs because when the war starts to wind down, people will move back into these stocks.
With that in mind, let’s take a closer look at ETFs that are seeing some significant inflows.