(Bloomberg) — Investors rushed back to risky assets amid Thursday’s stock market rally, pouring $7.3 billion in one day into the largest ETF tracking U.S. stocks.
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The flow into the $361 billion SPDR S&P 500 ETF Trust (ticker SPY) was the largest since the announcement of a vaccine against Covid in November 2020, and the sixth largest in more than a decade, according to data compiled by Bloomberg.
The cash inflow came as some of America’s largest banks agreed to help rescue another troubled regional lender, First Republic Bank, after the high-profile collapse of three institutions this month sparked widespread market turmoil. Hours earlier, the Swiss National Bank moved to support embattled financial giant Credit Suisse Group AG, further calming investors’ nerves.
It was all a huge reversal of the past few days. In the week through March 15, as the banking crisis unfolded, money market funds raised $112.7 billion, according to Bank of America Corp. based on data from EPFR Global. That was the biggest gain since the pandemic hit.
Thursday’s reassuring news from the banking sector spurred other large inflows. The $30 billion Financial Select Sector SPDR Fund (XLF) posted $1.2 billion in new cash, the most since 2021. The $4.1 billion SPDR S&P Regional Banking ETF (KRE), the largest regional banking fund, lured $756 million to. That was the ETF’s third-biggest ever haul, days after it raised a record $1.1 billion on Tuesday.
In other signs of reviving broader risk appetite, the $12.8 billion iShares iBoxx High Yield Corporate Bond ETF (HYG), which tracks riskier junk debt, added $888 million in its biggest inflow in six weeks. The $34.8 billion iShares iBoxx $Investment Grade Corporate Bond ETF (LQD) saw $502 million in new money, the most since November.
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