High Interest and Investment Surge in US Reshoring Themed ETFs
Investors are showing significant interest in exchange-traded funds (ETFs) focused on the reshoring movement to the United States. These ETFs have recorded a total net inflow of $2.25 billion this year, bringing the total assets to $9.67 billion. The Tema American Reshoring ETF saw its assets surge from $6 million in May 2023 to $101.5 million by the end of August, rising 16% year-to-date.
Following this trend, BlackRock launched the iShares U.S. Manufacturing ETF, which has outperformed the S&P 500 over the past 30 days. The First Trust RBA American Industrial Renaissance ETF and the Global X U.S. Infrastructure Development ETF have also seen their assets rise to $1.5 billion and $8.04 billion, respectively. Notably, in the US manufacturing sector, Caterpillar and Eaton Corp. have jumped 16.4% and 27.6%, respectively.
Congress has supported this reshoring trend with substantial funding for infrastructure projects and semiconductor manufacturing. However, an unexpected decline in US manufacturing construction spending has raised concerns, and there is speculation that the Federal Reserve may cut interest rates to mitigate economic slowdown.
Expert Jeff Mullenkamp has warned that reshoring does not necessarily guarantee high returns, urging a cautious approach to this investment theme.
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