Phyrex posted on X. Over the past three months, U.S. ETFs have seen net inflows exceeding $400 billion. These funds primarily originate from 401k plans, pensions, advisory models, target-date funds, and rebalancing activities. The investments are made based on perceived trends rather than valuations, indicating a belief that economic shifts are underway.
Although the funds are entering U.S. stock ETFs, they are not evenly distributed across the market. Instead, they tend to concentrate on assets with the largest index weights, particularly large-cap and tech-heavy stocks. This trend suggests confidence in a soft landing for the U.S. economy, expectations of interest rate cuts, narratives around AI productivity, a shift of cash from short-term bonds, and foreign investments seeking U.S. dollar assets.
In simpler terms, while some investors still view the current market as bearish, over $400 billion is being invested in anticipation of a more favorable trend by 2026.