Under The Radar ETFs With Big Inflows

August 02, 2017

Anyone following the ETF industry knows about the record-breaking inflows this year. If you haven't been keeping up, year-to-date inflows are $274 billion as of July 31, according to the latest ETF.com monthly flows data, courtesy of FactSet.

That's just shy of the $287.5 billion worth of inflows seen during the entirety of 2016, which itself was an annual record.

Our monthly flows report also lists the top ETF asset gainers for the year, and it's chock full of familiar names. Every ETF in the top 10 is issued by iShares or Vanguard, and each has at least $15 billion in assets under management. You won't find any up-and-coming ETFs on that list.

Most of this year's inflows are going to just a handful of giant ETFs. As a recent FactSet report points out, a mere 20 funds captured half the inflows in 2017. That's astounding―and great news for those funds―but that still leaves the other 2,000 ETFs, whose flows don't garner nearly as much attention.

Here we'll shine a spotlight on some of those lesser-known ETFs. Each of the funds on this list has at least $100 million in assets, has seen sizable inflows in 2017 and is "interesting" to us.

Futuristic Tech ETFs In Vogue

Technology is the top-performing sector of the stock market this year. That strong performance has translated into growing enthusiasm for a few tech-themed ETFs, which focus on cutting-edge technology companies.

The Global X Robotics & Artificial Intelligence ETF (BOTZ) and the ROBO Global Robotics and Automation Index ETF (ROBO) are two of those funds. Just based on their names, these ETFs certainly capture the imagination, so it's easy to see why investors are quickly scooping them up.

Currently, BOTZ has $270 million in assets, compared with a mere $4 million at the start of the year. ROBO has assets of $856 million, compared with $135 million at the start of the year.

For investors interested in investing in futuristic tech stocks―and the high risk/high reward that comes with them―BOTZ and ROBO certainly fit the bill.

A third fund that fits that bill is the PureFunds ISE Mobile Payments ETF (IPAY), which saw its name change Tuesday to ETFMG Prime Mobile Payments. Mobile payments are a trendy theme, and investors have been taking notice; assets in the fund nearly tripled—from around $50 million to $150 million—over the course of the year.

 

Ticker Fund AUM At
Start Of
Year ($M)
AUM
Currently
($M)
Inflows
($M)
BOTZ Global X Robotics & Artificial Intelligence ETF 4 270 245
ROBO ROBO Global Robotics and Automation Index ETF 135 856 625
IPAY PureFunds ISE Mobile Payments ETF 52 146 74

 

 

Lesser-Known EM ETFs Gain Traction

Like tech, emerging markets has been a hot area of the markets this year, both in terms of performance and flows. The large ETFs in the emerging market space, such as the iShares Core MSCI Emerging Markets ETF (IEMG) and the Vanguard FTSE Emerging Markets ETF (VWO), have unsurprisingly been big flow winners, but so too have a number of smaller emerging market funds.

Those include the PowerShares S&P Emerging Markets Momentum Portfolio (EEMO), the iShares Emerging Markets High Yield Bond ETF (EMHY), the Emerging Markets Internet & Ecommerce ETF (EMQQ), the J.P. Morgan Diversified Return Emerging Markets Equity ETF (JPEM) and the KraneShares CSI China Internet ETF (KWEB).

All of these funds hold emerging market equities, except EMHY, which focuses on emerging market high-yield bonds. With a yield-to-maturity of more than 6%, it's clear why investors have been scooping up this ETF in today's low-yield world.

 

Ticker Fund AUM At
Start Of
Year ($M)
AUM
Currently
($M)
Inflows
($M)
EEMO PowerShares S&P Emerging Markets Momentum Portfolio 1 331 295
EMHY iShares Emerging Markets High Yield Bond ETF 95 494 391
EMQQ Emerging Markets Internet & Ecommerce ETF 26 221 165
JPEM J.P. Morgan Diversified Return Emerging Markets Equity ETF 60 160 80
KWEB KraneShares CSI China Internet ETF 203 690 330

 

Contrarian Commodity Signals

Another area offering high yield that's picked up assets quickly this year is Master Limited Partnerships (MLPs). The InfraCap MLP ETF (AMZA) and the Global X MLP & Energy Infrastructure ETF (MLPX) both hold MLPs, which are energy infrastructure companies that pay large distributions.

Assets under management (AUM) for both ETFs more than doubled this year. AMZA is actively-managed, with $471 million in assets, while MLPX tracks and index and has $303 million in assets.

Staying with the commodities theme, the Sprott Junior Gold Miners ETF (SGDJ) and the iShares MSCI Global Gold Miners ETF (RING) saw their AUM leap higher this year after a controversial index change in a rival gold miner ETF, the VanEck Vectors Junior Gold Miners ETF (GDXJ), sapped demand for that multibillion-dollar product.

Meanwhile, the Global X Uranium ETF (URA) is a seldom-mentioned commodity fund where AUM ballooned from $127 million at the start of the year to $287 million currently. Based on these flows, perhaps some investors are anticipating a resurgence in commodity prices. 

 

Ticker Fund AUM At
Start Of
Year ($M)
AUM
Currently
($M)
Inflows
($M)
AMZA InfraCap MLP ETF 173 471 353
MLPX Global X MLP & Energy Infrastructure ETF 138 303 172
SGDJ Sprott Junior Gold Miners ETF 46 160 106
RING iShares MSCI Global Gold Miners ETF 140 376 218
URA Global X Uranium ETF 127 287 170

 

 

Unconventional Strategies

Rounding out this list of flows winners is a trio of unconventional ETFs. Two employ options overlay strategies: the Horizons Nasdaq-100 Covered Call ETF (QYLD) and the WisdomTree CBOE S&P 500 PutWrite Strategy Fund (PUTW). Both surpassed $100 million in AUM for the first time this year.

Then there's the JPMorgan Diversified Alternatives ETF (JPHF), an ETF that uses hedge-fundlike strategies to generate absolute returns. Assets in the fund nearly tripled this year, to $140 million currently.

 

Ticker Fund AUM At
Start Of
Year ($M)
AUM
Currently
($M)
Inflows
($M)
QYLD Horizons Nasdaq-100 Covered Call ETF 59 127 64
PUTW WisdomTree CBOE S&P 500 PutWrite Strategy Fund 31 192 154
JPHF JPMorgan Diversified Alternatives ETF 54 140 86

Sources: FactSet, Bloomberg

At the time of writing, the author held none of the securities mentioned. Contact Sumit Roy at [email protected].

 

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