Investors shift from defensive income to broad-market ETFs amid falling energy prices and Fed rate hike signals.

This week, investors moved capital from defensive income and dividend funds into broad-market equity ETFs, driven by a sharp drop in energy prices and signals from the Federal Reserve about potential future rate hikes. Vanguard's low-cost equity ETFs, especially mid-cap and small-cap funds, saw the largest inflows as oil price declines eased cost pressures. Meanwhile, defensive income strategies like gold and short-term Treasury ETFs experienced significant outflows as investors anticipate a "higher for longer" interest rate environment and take profits from tech-heavy sectors. This rotation highlights a shift toward diversified equity exposure amid evolving macroeconomic conditions.