Investors continued to add money into exchange-traded funds at a blistering pace in September, encouraged by a record run in the stock market. On net, $28.2 billion flowed into U.S.-listed ETFs during the month, according to the latest data from FactSet. That follows inflows of $29.9 billion for the month of August.
Year-to-date inflows now stand at $332.1 billion, a fresh annual record.
During the month, the S&P 500 hit a new all-time high around 2,519. The widely followed stock index was up 14.2% through the first nine months of 2017.
Meanwhile, the U.S. 10-year Treasury yield, perhaps the most widely followed bond benchmark, leapt to 2.33% by the end of September, up from where it started the month, at 2.12% (bond prices and yields move inversely).
Still, the sell-off in bonds didn't stop investors from putting money into fixed-income ETFs. They garnered the most inflows of any ETF segment during the month―$11.3 billion. That was followed by international equity ETFs, with $9.5 billion worth of inflows; and U.S. equity ETFs, with $5.6 billion.
Other segments to see notable inflows were international fixed-income ETFs, with $689 million; and commodity ETFs, with $2.2 billion.
Unfazed By Hawkish Yellen
One of the most noteworthy ETFs to see interest during September was the iShares 20+ Year Treasury Bond ETF (TLT). Its $2.5 billion worth of inflows catapulted total assets under management for the fund to $9.5 billion, an increase of 26%.
TLT was popular even as interest rates increased on the back of relatively hawkish comments from Federal Reserve Chair Janet Yellen. In a speech at the end of the month, Yellen said it could be risky to move "too gradually" in hiking interest rates.
Markets now imply there is a 70% chance that the Fed raises rates at the December central bank meeting.
Another popular ETF in September, despite falling prices, was the SPDR Gold Trust (GLD). Rising rates and a climbing dollar sent gold prices down $70/oz from their September peaks, but investors still added $2.4 billion to GLD.
Profit-Taking In Inverse VIX, Oil ETFs
Taking a look at the other side of the ledger, the ETF to see the largest outflows was the SPDR S&P 500 ETF Trust (SPY). SPY's outflows of $10.7 billion were well ahead of any other fund.
The ProShares Short VIX Short-Term Futures ETF (SVXY) and the VelocityShares Daily Inverse VIX Short-Term ETN (XIV) were two other losers on the list, with outflows of $583 million and $419 million, respectively.
Both funds rallied hard in September, and are among the top-performing ETFs of 2017, with year-to-date gains of 107%.
Finally, another fund worth mentioning is the United States Oil Fund (USO), another big loser during the month, with outflows of $490 million. Traders took profits in the fund as oil prices briefly hit a five-month high during September.
Contact Sumit Roy at [email protected]
Top Gainers (September 2017)
|Ticker||Name||Issuer||Net Flows ($,mm)||AUM ($M)||% of AUM||YTD 2017 Net Flows($,M)|
|IWM||iShares Russell 2000 ETF||BlackRock||2,458.15||41,153.33||6.35%||-553.09|
|TLT||iShares 20+ Year Treasury Bond ETF||BlackRock||2,453.29||9,515.84||34.74%||4,054.16|
|GLD||SPDR Gold Trust||State Street Global Advisors||2,040.32||35,643.47||6.07%||1,994.87|
|IEFA||iShares Core MSCI EAFE ETF||BlackRock||2,009.20||35,740.83||5.96%||16,477.27|
|VWO||Vanguard FTSE Emerging Markets ETF||Vanguard||1,560.94||62,002.57||2.58%||8,540.17|
|VOO||Vanguard S&P 500 ETF||Vanguard||1,265.42||73,773.19||1.75%||9,953.35|
|XLF||Financial Select Sector SPDR Fund||State Street Global Advisors||1,186.63||27,219.60||4.56%||2,455.14|
|HYG||iShares iBoxx $ High Yield Corporate Bond ETF||BlackRock||1,172.19||19,332.49||6.45%||77.68|
|VEA||Vanguard FTSE Developed Markets ETF||Vanguard||988.17||62,347.82||1.61%||14,165.68|
|IJR||iShares Core S&P Small Cap ETF||BlackRock||902.35||33,211.14||2.79%||4,996.86|
Top Gainers (Year-to-Date)
|Ticker||Name||Issuer||Net Flows ($,mm)||AUM ($M)||% of AUM||September 2017 Net Flows($,M)|
|IVV||iShares Core S&P 500 ETF||BlackRock||23,306.80||125,844.80||22.73%||152.97|
|IEFA||iShares Core MSCI EAFE ETF||BlackRock||16,477.27||35,740.83||85.54%||2,009.20|
|VEA||Vanguard FTSE Developed Markets ETF||Vanguard||14,165.68||62,347.82||29.40%||988.17|
|IEMG||iShares Core MSCI Emerging Markets ETF||BlackRock||13,403.30||37,215.54||56.29%||752.76|
|VOO||Vanguard S&P 500 ETF||Vanguard||9,953.35||73,773.19||15.60%||1,265.42|
|LQD||iShares iBoxx $ Investment Grade Corporate Bond ETF||BlackRock||9,505.06||37,485.21||33.97%||-835.74|
|EFA||iShares MSCI EAFE ETF||BlackRock||9,481.25||79,767.07||13.49%||0.00|
|VWO||Vanguard FTSE Emerging Markets ETF||Vanguard||8,540.17||62,002.57||15.97%||1,560.94|
|AGG||iShares Core U.S. Aggregate Bond ETF||BlackRock||8,145.51||50,304.97||19.32%||506.44|
|VCIT||Vanguard Intermediate-Term Corporate Bond ETF||Vanguard||6,747.50||17,416.10||63.25%||872.63|