Massive Weekly Inflows For Russell-Indexed ETFs

June 22, 2018

ETF flows were salvaged this week as the Russell reconstitution trade offset trade war concerns. On net, $7.5 billion flowed into U.S.-listed ETFs during the week ending Thursday, June 21, according to FactSet.

Heading into Thursday, ETFs were on track for net outflows of nearly $10 billion as traders eased up on their equity positions amid rising trade tensions between the U.S. and China. But then Thursday rolled around, and a whopping $16.5 billion flooded into ETFs—mostly funds tracking Russell indices.

That's likely no coincidence. After the market close today (Friday, June 22), Russell will reconstitute all of its U.S. Russell indices, including the popular Russell 1000 and Russell 2000 indices. Funds tracking those indices will have to buy and sell stocks based on the new index makeup.

Heavy Trading

The event typically leads to heavy trading activity in the U.S. stock market. When Russell indices rebalance, it's typically one of the highest-volume days of the year.

Ahead of the reconstitution, ETFs tracking Russell indices saw a flurry of activity—perhaps related to some investors using sophisticated trading strategies to profit from the annual event. Eight of the top 10 ETFs with the largest inflows this week were iShares Russell ETFs, including the iShares Russell 1000 Growth ETF (IWF), the iShares Russell 1000 Value ETF (IWD) and the iShares Russell 2000 Value ETF (IWN).

Inflows into those funds helped offset sizable outflows from the likes of the Vanguard High Dividend Yield ETF (VYM), the iShares MSCI Emerging Markets ETF (EEM) and the Vanguard Small-Cap ETF (VB).

On net, $11 billion flowed into U.S. equity ETFs during the week, and $480 million went into U.S. fixed-income ETFs. On the other hand, international equity ETFs had net outflows of $3.4 billion.

Year-to-date inflows for all U.S.-listed ETFs now stand at $142.5 billion.

Top 10 Creations (All ETFs)

Ticker Name Net Flows ($,mm) AUM ($, mm) AUM % Change
IWF iShares Russell 1000 Growth ETF 4,130.99 47,771.75 9.47%
SPY SPDR S&P 500 ETF Trust 2,765.95 268,854.08 1.04%
IWD iShares Russell 1000 Value ETF 2,514.74 39,019.61 6.89%
QQQ Invesco QQQ Trust 2,311.11 69,008.39 3.47%
IWN iShares Russell 2000 Value ETF 1,843.68 12,355.63 17.54%
IWP iShares Russell Mid-Cap Growth ETF 1,812.54 10,948.62 19.84%
IWM iShares Russell 2000 ETF 1,808.89 50,194.18 3.74%
IWS iShares Russell Mid-Cap Value ETF 1,361.86 12,198.75 12.57%
IWO iShares Russell 2000 Growth ETF 1,274.20 12,411.06 11.44%
IWV iShares Russell 3000 ETF 895.60 9,562.87 10.33%

Top 10 Redemptions (All ETFs)

Ticker Name Net Flows ($,mm) AUM ($, mm) AUM % Change
VYM Vanguard High Dividend Yield ETF -3,109.78 21,218.23 -12.78%
EEM iShares MSCI Emerging Markets ETF -2,932.10 32,666.67 -8.24%
VB Vanguard Small-Cap ETF -1,940.47 24,332.88 -7.39%
XLF Financial Select Sector SPDR Fund -1,202.07 31,018.30 -3.73%
IJH iShares Core S&P Mid-Cap ETF -957.36 48,283.15 -1.94%
EFA iShares MSCI EAFE ETF -949.00 73,643.08 -1.27%
VBK Vanguard Small-Cap Growth ETF -782.50 8,490.78 -8.44%
XLI Industrial Select Sector SPDR Fund -614.68 12,007.54 -4.87%
HYG iShares iBoxx USD High Yield Corporate Bond ETF -600.81 14,755.28 -3.91%
IVV iShares Core S&P 500 ETF -586.41 151,503.08 -0.39%

ETF Weekly Flows By Asset Class

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 11,040.67 2,064,442.75 0.53%
International Equity -3,378.53 808,216.00 -0.42%
U.S. Fixed Income 476.28 547,098.36 0.09%
International Fixed Income 222.82 61,912.37 0.36%
Commodities  -200.43 67,019.51 -0.30%
Currency -0.78 1,206.39 -0.06%
Leveraged -327.69 36,082.03 -0.91%
Inverse -185.79 13,179.73 -1.41%
Asset Allocation -112.24 9,332.86 -1.20%
Alternatives -61.16 4,303.66 -1.42%
Total: 7,473.14 3,612,793.67 0.21%

Top 10 Volume Surprises, Funds >$50 mm AUM

Ticker Name Average Volume
(30 Day)
1 Week Average
Volume
% of Average
AGT iShares MSCI Argentina and Global Exposure ETF 19,761 96,644 489.06%
HOLD AdvisorShares Sage Core Reserves ETF 727 2,954 406.34%
DMRM DeltaShares S&P 400 Managed Risk ETF 1,915 6,953 363.04%
ARCM Arrow Reserve Capital Management ETF 93 248 267.32%
VXXB iPath Series B S&P 500 VIX Short Term Futures ETN 5,362 17,887 333.58%
FSZ First Trust Switzerland AlphaDEX Fund 6,742 19,432 288.20%
CLTL Invesco Treasury Collateral ETF 654 1,662 254.17%
BICK First Trust BICK Index Fund 7,463 21,742 291.32%
DMRL DeltaShares S&P 500 Managed Risk ETF 3,539 8,386 236.99%
FNX First Trust Mid Cap Core AlphaDEX Fund 45,284 141,086 311.56%

 

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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