World’s largest ETF adds $7.3 billion in a day after bank rescue

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(Bloomberg) — Investors flocked back to riskier assets amid Thursday’s stock market rebound, pouring $7.3 billion into the largest ETF tracking U.S. equities in single day.

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Inflows into the $361 billion SPDR S&P 500 ETF Trust (ticker SPY) were the most since the announcement of vaccine for Covid in November 2020, and the sixth largest in a decade, according to data compiled by Bloomberg.

Some of America’s biggest banks agreed to help rescue another troubled regional lender, First Republic Bank, after the high-profile collapse of three institutions this month sparked broader market turmoil. Hours earlier, the Swiss bank moved to support beleaguered financial giant Credit Suisse Group AG, further easing investor nerves.

All this was vast reversal from the recent past. During the week to March 15, as the bank crisis unfolded, money market funds absorbed $112.7 billion, according to Bank of America Corp., citing data from EPFR Global. It was the biggest jump for cash since the pandemic hit.

Thursday’s reassuring news from the banking sector prompted other big inflows. The $30 billion Financials Select Sector SPDR Fund (XLF) posted new cash of $1.2 billion, the most since 2021. The $4.1 billion SPDR S&P Regional Banking ETF (KRE), the largest regional bank fund, attracted $756 million. It was the ETF’s third-biggest haul ever, days after it attracted record $1.1 billion on Tuesday.

In other signs of reviving broader risk appetite: The $12.8 billion iShares iBoxx High Corporate Bond ETF (HYG), which tracks riskier junk debt, added $888 million in its biggest inflows for 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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