March Madness wasn’t just for basketball — it was for stocks, too. Exchange-traded funds (ETFs) scored big and witnessed an exceptional rise in demand, with over $126.5B in inflows — the third strongest showing since 2021. Despite steep tech sector valuations, investors display an appetite for new trading avenues.

• ETFs tracking the industrials, materials, and energy sectors led the inflows and contributed $1.4B, $1.3B, and $600M, respectively.
• Over the same period, $600M was pulled out of the technology sector — and healthcare ETFs saw outflows of $700M.

Is the ETF (Exceptional Trading Frenzy) going to continue? According to FactSet, the materials, energy, and industrial sectors have seen the largest volume of earnings downgrades. Investors might be hoping that analysts are wrong — or looking for a safer place to put their cash. With tech valuations sitting above historic levels and megacaps representing the majority of index gains so far in 2024, a shift towards more cyclical, value-oriented stocks could be the contrarian trade investors need.

Read: Discover why ETFs are reshaping the investment game and what this means for your financial future.