Cash ETFs Draw Record $36B With Even Dalio Changing Tune

The $25 billion SPDR Bloomberg 1-3 Month T-Bill ETF (ticker BIL) has led the way with a $11.2 billion influx so far in 2022, on track for a record annual inflow. Meanwhile the $23 billion iShares Short Treasury Bond ETF (SHV) has also taken in over $10 billion so far this year, closing in on its 2018 record of $12.7 billion.

Financial markets have been upended by a string of ultra-aggressive Fed hikes, with the promise of more to come. That’s crushed traditional portfolio mixes as stocks and bonds quiver in unison.

Cash was the only “major” asset class that gained in the third quarter with returns of 0.5%, while the S&P 500 tumbled 4.9% and returns on long-term Treasuries fell 10%, Bank of America analysts wrote in a report Monday.

Still, not everyone is on board. Sitting in cash is “a costly decision over the long run,” Citi Private Bank strategists led by David Bailin said in a note Monday, writing that the Fed is set to reach peak interest rates next year — setting the dollar up for a dive and making growth stocks more attractive.

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