Traditional Sectors See Influx of Funds Amid AI Rally and Geopolitical Tensions
In the midst of an artificial intelligence (AI) rally, traditional sectors such as energy and industrials, which had been overlooked for some time, are now experiencing significant inflows of capital. Analysts predict that, as the dominance of AI technology stocks shows signs of slowing, funds will shift towards value stocks due to a re-evaluation of traditional industries and heightened geopolitical tensions, particularly related to Iran.
According to ETF.com on the 19th (local time), the Energy Select Sector SPDR (XLE), listed on the US stock market, has seen a net inflow of $4.128 billion (approximately 5.99 trillion won) this year. This exchange-traded fund (ETF), which invests in fossil fuel companies such as ExxonMobil, topped the list for net inflows among thematic US stock ETFs during this period. In just last month, $2.657 billion flowed into this fund, marking the highest monthly net inflow since September 2008, and demonstrating a stark contrast to the $8.09 billion in net outflows it experienced last year.
Significant capital is also being funneled into ETFs related to industrials, dividends, and finance. The representative ETF for the industrial sector, the Industrial Select Sector SPDR (XLI), has seen a net inflow of $2.169 billion this year. The Schwab US Dividend Equity (SCHD), affectionately referred to as Schud among domestic investors, has attracted $2.090 billion during the same period. Additionally, the Financial Select Sector SPDR (XLF) recorded a net inflow of $1.778 billion.
Market analysts attribute this shift towards traditional industries to concerns over valuation pressures related to AI bubble theories and escalating geopolitical tensions. The emergence of a potential crisis in the software industry due to the advancement of AI technology is contributing to the re-evaluation of these traditional sectors. As economic uncertainties persist, investors seem to be gravitating towards more stable, value-oriented investments, signaling a significant shift in market dynamics.
According to ETF.com on the 19th (local time), the Energy Select Sector SPDR (XLE), listed on the US stock market, has seen a net inflow of $4.128 billion (approximately 5.99 trillion won) this year. This exchange-traded fund (ETF), which invests in fossil fuel companies such as ExxonMobil, topped the list for net inflows among thematic US stock ETFs during this period. In just last month, $2.657 billion flowed into this fund, marking the highest monthly net inflow since September 2008, and demonstrating a stark contrast to the $8.09 billion in net outflows it experienced last year.
Significant capital is also being funneled into ETFs related to industrials, dividends, and finance. The representative ETF for the industrial sector, the Industrial Select Sector SPDR (XLI), has seen a net inflow of $2.169 billion this year. The Schwab US Dividend Equity (SCHD), affectionately referred to as Schud among domestic investors, has attracted $2.090 billion during the same period. Additionally, the Financial Select Sector SPDR (XLF) recorded a net inflow of $1.778 billion.
Market analysts attribute this shift towards traditional industries to concerns over valuation pressures related to AI bubble theories and escalating geopolitical tensions. The emergence of a potential crisis in the software industry due to the advancement of AI technology is contributing to the re-evaluation of these traditional sectors. As economic uncertainties persist, investors seem to be gravitating towards more stable, value-oriented investments, signaling a significant shift in market dynamics.
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