Welcome to Thoughts in the Market.

I'm Andrew Sheets, Chief Cross-Asset Stragist for Morgan Stanley.

Along with my colleagues bringing a variety of perspectives, I'll be talking about trends

across the global investment landscape and how we put those ideas together.

It's Friday, April 16th at 2pm in London.

I find there's always a great deal of interest from investors in what other investors are doing.

Some of this is natural curiosity and keeping tabs on the competition, but where money is

moving also has obvious impacts for the market.

Today, I'm going to talk about flows in exchange-traded funds and how they influence our broader

market thinking.

Exchange-traded funds or ETFs are obviously only one of several ways that people invest,

but they're a large one.

ETF data compiled by my colleagues for Netang covers funds with over 5.7 trillion in assets.

This data has some other nice properties, being timely and also being quite specific, as

many ETFs reflect a particular asset class or sector.

The most striking thing about this data is how much money has been flowing into the market.

Over the last 12 months, about $650 billion has flowed into stock and bond ETFs, a flow

that's unusually large versus history, and may help explain why markets have been so strong.

It also tells us something about the nature of those flows.

Parts of the market have unquestionably seen speculative activity as money is poured into

smaller, more volatile companies.

But the ETF data suggests that the real story is more boring.

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