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ETFs had their most active trading day ever this week with $633 billion worth of trading just on April 7th. That represents over 40% of all equity trading volume. Investors are clearly searching for certainty and moving around money amid a seesawing market. I want to bring in Julie Gans Alliance, Bernstein Global Head of ETF strategy and partnerships for this week's ETF report brought to you by Invesco QQQ. Julie, thank you for being here. Appreciate it. So thanks for having me. Obviously a lot of activity going on. What are the flows indicating to you about sentiment at this moment?

Sure. I mean, it's really interesting, um, like you said, ETFs had a record day on Monday, um, represented over 40% of the ETF flows and the flows are changing day to day. So if you look at the weekly flows for last week, you know, big inflows into fixed income, outflows into equities. I checked the flows this morning, that's reversed. You know, you're seeing equity inflows into kind of just mainstream US stocks. I think people buying the dip or potentially taking advantage of market dislocations to do some tax loss harvesting. Uh, we still see some inflows into safer fixed income, so short duration, ultra short, almost an alternative to cash. But we saw selling yesterday in, in kind of the riskier parts of, of the market in credit, high yield CLOs, loans, um, as people try to figure out, you know, what does the future look like and how to position for the volatility.

So I'm curious about because ETFs clearly are a way for people to get broad exposure. I get it. But now that the market's had this big drawdown, we have, you have leveraged ETFs, right? Triple leverage ETFs, which can cut both ways depending on which side you're on, right? But I'm curious if you've seen with this big drawdown, if you've seen more money, people making a bet, like they, like they're going to go long the S&P, that it's down here, so they're going to go long the triple weighted, the triple weighted, uh, triple leverage ETF.

Yeah, so I haven't seen that. Um, I think, you know, exactly, people have gotten a bit burned by those over the past few days, so I don't know if they're willing to step back in yet. Um, but we did see broad based buying yesterday, uh, in kind of the more traditional S&P kind of Nasdaq ETFs.

I think it's important though for, for the listener to understand is those triple leverage ETFs are not long-term plays at all. They're very strategic. If you want to go in ETFs to your point, you know, the broad ETFs, whether they're sector specific like tech or healthcare or broad S&P, but when you talk about specific leverage ETFs, investors and traders and the retail public has to be very careful with, with them because they can cut so quickly.

Yeah, yeah, and I think that's, that's a, a very key point. Like there's an ETF for almost everything today. Um, so understanding, you know, do you want passive beta exposure? Are you looking for certain subsets of the market? Active ETFs have seen, seen huge growth. So at Alliance Bernstein were, you know, only active ETFs. And so that even opens up another subset of the market where if you want, you know, a research driven process, if you're a bit more of a long-term investor, there's an ETF for you as well.

Right. And I've been getting, and I'm sure we've all experienced this, but I've been getting like hundreds of questions a day and on social media from folks asking, okay, I hear the stock market's on sale. Should I be getting in? Like, what should I do? Should I finally open a brokerage? Um, are you able to suss out how much new money is part of these ETF flows?

I wish I could. Um, you know, the beauty of ETFs is that they're exchange traded. One of the downsides of ETFs is you don't know who is buying, selling at the time. Um, I think, you know, the trends that we're seeing, ETFs in the US saw over a trillion dollars in net inflows last year. Year to date, it's $300 billion. Like there is demand. Um, and so I think, you know, the shifts we've seen within the last week are probably people repositioning within ETFs, but also net new money coming into the vehicle.

But it's easy to do that in an ETF because it's liquidated, trades like a stock, unlike a mutual fund, you know, which, which is not so easy to trade, right? You, you get the end of the day price and that's it. And in ETF, I think people feel like they have more control, um, and you can also recreate almost any mutual fund with a range of ETFs.

Yeah, and, and exactly, like I think the beauty of the ETFs, there, there's a few things. There's the, the transparency. So you know what you own on a day-to-day basis, whereas mutual funds, there's usually a lag in disclosure. There's the intraday trading. So when you want to get into something, you get the price, you know, and executed, not the end of day nav, which it might be for the mutual funds. Um, and yeah, with, with the proliferation of active ETFs, you can, like I said, buy almost anything in an ETF. And so you're, you're given a lot of choices.

Go ahead. And it gives you also for, for the, for the listener, if they don't know that, you can, you can, you can drill down into the ETF to see what the actual percentage weightings are. So for instance, the XLK, you can see the top, top three holdings make up nearly 40% of that ETF. And you, without necessarily realizing it, if you own Apple as an individual investment, and now you go buy the XLK, you could potentially be coming overweight in Apple just because of the position it has in the ETF. So people need to understand that as well.

Yeah, and I think that transparency into holdings helps the, the end investor who wants to open a brokerage account, but it also helps financial advisors and look at their portfolio of risks because the different tools can dig into the underlying and exactly as you say, I own these five ETFs, they're all overweight Apple, I'm actually very exposed to Apple.

Right. And that's, and that's an issue that investors need to make sure they understand. Yep.