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Stay At Home: Flight-To-Safety And Home Bias In U.S. Etfs During Covid-19 Pandemic, Hamed Yousefi, Mohammad Najand

College of Business (Strome) Posters

We examine the relations between dollar flows of U.S. traded ETFs with exposure to the U.S., Europe, Asia, and the rest of the world during the COVID-19 crisis utilizing a Markov Switching Model (MSVAR). We find convincing evidence that investors use ETFs to gain exposure to foreign markets. This study differs from the new stream of research on the effects of COVID-19 on financial markets and investors’ reactions in two major ways. First, we follow the money by using actual dollars of fund flows, whereas previous studies use returns. Second, we investigate the existence of two distinct regimes during this …