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April Flash Flows: The Global Rally Train Keeps A-Rollin’


Head of SPDR Americas Research

  • Fresh off a record Q1, ETFs took in over $70 billion in April and have raised the 2021 total to over $320 billion
  • Equity ETFs had nearly $50 billion of inflows in April, led by US equity strategies
  • Cyclical sector (+$8 billion) and value ETFs (+$ 7 billion) were once again targeted

Train Kept A-Rollin’ is an iconic rock-and-roll song, popularized by the up-tempo, but still blues-rock, style of Aerosmith — leading it to become a staple of the classic rock genre. Yet, it was first recorded by the jazz and rhythm and blues musician Tiny Bradshaw in 1951, and later updated/adapted to the more blues-rock feel we now know by the Yardbirds and Led Zeppelin in the late 1960’s. No matter which version is labeled as the best rendition, the blues-rock hit is still reflective of the current market environment.

Throughout the five minute and twenty-three second Aerosmith version from their “Get Your Wings” album, the narrative arc juxtaposed against Joe Perry’s blues riffs is a tale of power and endurance. And the same commentary can be made about the market’s recent rally. Over 75% of global equities are now trading above their 200-day moving average and 83% of stocks have posted gains (+35% average gain) since October, when the rally began in earnest given the presence of a vaccine timeline.1

Getting more granular, higher-risk stocks, as measured by high-beta names, have outperformed the market and their low volatility counterparts by 45% and 56% respectively since the end of October, posting a return of 74%.2 Additionally, the more risk-on, cyclical value and small-cap names have posted 55% and 48% returns since then — figures well above broad US large-caps.3

Earnings results have also come in stronger than expected, illustrating the power of the recovery. In the US, 84% of firms are surprising to the upside, well above the five-year average of 64%. And the magnitude of surprises is 26%. This high level of surprises has pushed year-over-year EPS growth to 49.8%.4 Outside of the US, 72% of European firms have beaten expectations by 32% — pushing Q1 growth to a staggering 80% on a year-over-year basis.5

Economic data is also showing power and endurance, evidenced by the fact the US economy has expanded for three straight quarters and accelerated in the first quarter when a rush of consumer spending helped bring total output near pre-pandemic levels. And personal consumption, the biggest part of the economy, surged by the second fastest rate since the 1960’s in the recent quarter.6

In Europe, while gross domestic product dipped in Q1, euro-area unemployment improved in March. And the outlook has started to brighten as vaccine rates begin to pick up and economies more fully re-open. There is also the potential boost on the horizon from the $968 billion fiscal stimulus package set to be deployed to the area.7

With this level of positivity, it is clear that following a once-in-a-lifetime crisis, the global economy continues to stage a once-in-a-lifetime recovery. From a business cycle perspective, the US has already started to move from recovery to expansion.8 And like the buds on flowers starting to open to the warmth of sunlight, business, storefronts, restaurants, hotels, and event locations are all starting to increase capacity and re-open their doors to society — evidenced by US mobility approaching its post-pandemic highs.9

A Rising Tide Lifts All Boats

US-listed ETFs have been on a roll for the past six months, taking in $482 billion since the end of October — with $325 billion amassed in the first four months of 2021 alone. ETFs are on the greatest three-, four-, six-, and twelve-month rolls ever, as shown below. On a six-month basis, the $482 billion is four times the typical average. These records indicate that, with markets rolling to a 30% return since October, capital has been deployed at a frenetic pace as investors seek to participate in the recovery rally.

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1 Bloomberg Finance, L.P., as of April 30, 2021. Based on the MSCI ACWI Index.
2 Bloomberg Finance, L.P., as of April 30, 2021. Based on the S&P 500® High Beta Index, S&P 500® Index, and S&P® 500 Low Volatility Index.
3 Bloomberg Finance, L.P., as of April 30, 2021. Based on the Russell 2000 Index and the S&P 500® Pure Value Index.
4 Bloomberg Finance, L.P., Barclays, as of April 30, 2021.
5 Bloomberg Finance, L.P., Barclays, as of April 30, 2021.
6 “U.S. Recovery Gain Steam as Spending Fuels 6.4% GDP Growth,” Bloomberg, April 29, 2021.
7 “Europe Is Casting Aside Double-Dip Slump as Growth Restarts,” May 3, 2021.


Low Volatility
Characterized by low levels of standard deviations or low beta.

MSCI ACWI Index is a market capitalization-weighted index designed to provide a broad measure of equity market performance throughout the world.

S&P 500® Index
A market-capitalization-weighted stock market index that measures the stock performance of the 500 largest publicly traded companies in the United States.

S&P 500® Pure Growth and Pure Value Index
a style-concentrated index designed to track the performance of stocks that exhibit the strongest value or growth characteristics by using a style-attractiveness-weighting scheme.

S&P 500® Low Volaitlity Index
Designed to reflect the performance of the 100 least volaitlie stocks as measured by standard deviation of returns.

S&P 500® High Beta Index
Designed to reflect the performance of the 100 highest beta stocks as measured by the beta to the S&P 500.

S&P/LSTA Leveraged Loan 100 Index
The S&P/LSTA U.S. Leveraged Loan 100 Index is designed to reflect the performance of the largest facilities in the leveraged loan market.

Characterized by lower price levels relative to fundamentals, such as earnings.

Originally Posted on May 5, 2021 – April Flash Flows: The Global Rally Train Keeps A-Rollin’


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