$500B In New ETF Assets For 2017 Nears

December 15, 2017

Investors poured nearly $30 billion into U.S.-listed ETFs in the past week, bringing total net creations so far in 2017 to $466 billion.

The massive, record asset-gathering pace now sits just inches away from what could be a new milestone for the ETF market: $500 billion in net inflows in one calendar year. With two weeks to go in December, hitting $500 billion seems very likely.

For perspective, consider that 2016 also saw record-breaking asset gathering in the U.S. ETF space, with net creations reaching $287.5 billion last year. We are on pace to almost double that haul in 2017. What’s more, combined with performance, the asset inflows grew the ETF market to $3.4 trillion in total assets—that’s almost $1 trillion bigger than where the market sat a short year ago.

The bulk of the demand continues to center on some of the cheapest, most traded and most popular ETFs by the largest ETF providers: iShares, Vanguard and State Street. In the past week specifically, the driving asset class was U.S. equities, which saw some $25 billion in net inflows, and dominated the top creations list. The SPDR S&P 500 ETF Trust (SPY) alone saw a massive $10 billion in net inflows in a week.

Value Returns

Perhaps most notable among the top funds in the week was the demand for value ETFs—a factor that has lagged other factors this year and has underperformed the S&P 500.

Still, the iShares S&P 500 Value ETF (IVE), the iShares S&P Mid-Cap 400 Value ETF (IJJ) and the iShares S&P Small-Cap 600 Value ETF (IJS) attracted a combined $4.8 billion in assets in a week. These ETFs are up anywhere from 10 to 14% year-to-date.

 

 

Small-Cap Biggest Net Losers

On the redemptions side, no fund was as unpopular as the largest U.S. small-cap ETF, the iShares Russell 2000 ETF (IWM). The fund faced more than $2.1 billion in net outflows in a week.

So far in 2017, small-caps have had a rocky year, marked by underperformance relative to larger-cap names.

 

 

Bitcoin’s Impact On ETFs

On the performance side, it’s worth noting that the bitcoin craze has impacted ETFs. Outside of a short volatility strategy, the two best-performing ETFs year-to-date are the only two that currently offer any exposure to bitcoins: the ARK Web x.0 ETF (ARKW) and the ARK Innovation ETF (ARKK). They are each up more than 87% this year. ARKW has 8.8% of its portfolio in bitcoins, and ARKK has 8.2%—both achieved via allocations to the Grayscale Bitcoin Trust (GBTC). 

 

Top 10 Creations (All ETFs)

Ticker Name Net Flows ($,mm) AUM ($, mm) AUM % Change
SPY SPDR S&P 500 ETF Trust 9,991.95 271,464.54 3.82%
IVE iShares S&P 500 Value ETF 2,251.94 17,442.75 14.82%
IJJ iShares S&P Mid-Cap 400 Value ETF 1,404.16 7,250.47 24.02%
IJS iShares S&P Small-Cap 600 Value ETF 1,196.33 6,431.17 22.85%
VTI Vanguard Total Stock Market ETF 1,030.35 92,200.07 1.13%
VUG Vanguard Growth ETF 979.36 32,270.28 3.13%
VB Vanguard Small-Cap ETF 928.52 22,208.26 4.36%
IVV iShares Core S&P 500 ETF 856.06 142,884.63 0.60%
SHV iShares Short Treasury Bond ETF 606.36 7,828.08 8.40%
HDV iShares Core High Dividend ETF 581.39 7,314.90 8.63%

Top 10 Redemptions (All ETFs)

Ticker Name Net Flows ($,mm) AUM ($, mm) AUM % Change
IWM iShares Russell 2000 ETF -2,179.23 44,703.37 -4.65%
HYG iShares iBoxx $ High Yield Corporate Bond ETF -671.98 18,615.69 -3.48%
SMH VanEck Vectors Semiconductor ETF -405.76 1,017.85 -28.50%
ITOT iShares Core S&P Total U.S. Stock Market ETF -364.96 12,480.68 -2.84%
HEDJ WisdomTree Europe Hedged Equity Fund -322.30 7,977.90 -3.88%
IYR iShares U.S. Real Estate ETF -277.67 4,104.80 -6.34%
SVXY ProShares Short VIX Short-Term Futures ETF -201.64 1,052.20 -16.08%
VWO Vanguard FTSE Emerging Markets ETF -183.11 64,682.39 -0.28%
IWO iShares Russell 2000 Growth ETF -165.56 9,338.34 -1.74%
TQQQ ProShares UltraPro QQQ -150.07 2,408.70 -5.86%

ETF Weekly Flows By Asset Class

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 25,323.88 1,921,545.99 1.32%
International Equity 1,889.07 783,138.19 0.24%
U.S. Fixed Income 1,419.15 523,085.68 0.27%
International Fixed Income 285.93 57,690.00 0.50%
Commodities  234.09 64,325.48 0.36%
Currency -39.65 1,242.88 -3.19%
Leveraged 152.07 33,349.49 0.46%
Inverse -300.21 16,202.13 -1.85%
Asset Allocation 36.65 8,926.57 0.41%
Alternatives 133.30 4,253.14 3.13%
Total: 29,134.28 3,413,759.54 0.85%

Top 10 Volume Surprises, Funds >$50 mm AUM

Ticker Name Average Volume
(30 Day)
1 Week Average
Volume
% of Average
NFRA FlexShares STOXX Global Broad Infrastructure Index Fund 34,197 131,350 384.10%
TPYP Tortoise North American Pipeline Fund 45,747 163,054 356.42%
PUI PowerShares DWA Utilities Momentum Portfolio 10,621 35,595 335.14%
EFV iShares MSCI EAFE Value ETF 449,228 1,552,694 345.64%
PXE PowerShares Dynamic Energy Exploration & Production Portfolio 14,284 46,946 328.66%
TDIV First Trust NASDAQ Technology Dividend Index Fund 74,191 234,239 315.72%
ONEO SPDR Russell 1000 Momentum Focus 8,948 23,545 263.12%
HYGH iShares Interest Rate Hedged High Yield Bond ETF 13,041 28,272 216.79%
IWY iShares Russell Top 200 Growth ETF 164,873 354,775 215.18%
ACWV iShares Edge MSCI Min Vol Global ETF 181,086 416,178 229.82%

 

Disclaimer: All data as of 6 a.m. Eastern time the date the article is published. Data is believed to be accurate; however, transient market data is often subject to subsequent revision and correction by the exchanges.

 

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