As the U.S. ETF industry moves past the $500 billion inflow mark so far this year, Vanguard, BlackRock and State Street have accounted for more than three-fifths of every dollar that’s entered the space.
ETFs from those issuers exclusively make up the top 10 largest funds in the U.S. market as of July 27, according to ETF.com data provider FactSet. Out of the top 100 funds, the trio has amassed just under $334 billion in this year’s inflows.
The top three funds are all broad-market stock followers, with the Vanguard S&P 500 ETF (VOO), the Vanguard Total Stock Market ETF (VTI) and the iShares Core S&P 500 ETF (IVV) pulled in a combined total of more than $68 billion.
The Schwab U.S. Dividend Equity ETF (SCHD) had the most inflows to date outside of the big three issuers, with just more than $7 billion coming in.
Top 10 ETF Inflows Year-To-Date
|Ticker||Fund||YTD Inflows ($M)|
|VOO||Vanguard S&P 500 ETF||$31,440.07|
|VTI||Vanguard Total Stock Market ETF||$22,844.17|
|IVV||iShares Core S&P 500 ETF||$13,898.45|
|BND||Vanguard Total Bond Market ETF||$13,138.21|
|VTV||Vanguard Value ETF||$10,684.57|
|IEMG||iShares Core MSCI Emerging Markets ETF||$9,733.04|
|IUSB||iShares Core Total USD Bond Market ETF||$9,028.02|
|BSV||Vanguard Short-Term Bond ETF||$8,023.53|
|XLF||Financial Select Sector SPDR Fund||$8,006.02|
|BNDX||Vanguard Total International Bond ETF||$7,814.66|
Data as of July 27, 2021
Vanguard funds combined generated inflows of just under $91.4 billion among six funds out of the top 10 so far this year.
VOO by itself has seen inflows of $31.4 billion, almost a third more than the second-place VTI, and nearly matching the combined haul of roughly $33 billion that BlackRock’s three ETFs in the top 10 have seen.
State Street’s lone entrant into the top 10 is the Financial Select Sector SPDR Fund (XLF), with $7.9 billion.
Vanguard’s dominance is even stronger when comparing the top 100 funds by inflows. The firm has a staggering $181.7 billion in inflows, well ahead of BlackRock’s $112.8 billion. But those two are far ahead in growth this year, as every other issuer with a fund in the top 100 had combined flows of $89.6 billion among 41 products.
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The funds with the largest outflows this year are more varied across sectors, but high yield corporate bonds took the largest losses so far, with a combined loss of $24 billion among three of the top 10 ETFs for outflows. The likely reason is that junk bonds aren’t eligible for the corporate bond-buying program the Federal Reserve implemented at the beginning of the pandemic, making the space more susceptible to fears of default, while not producing similar returns to equities.
Top 10 ETF Outflows Year-To-Date
|Ticker||Fund||YTD Outflows ($M)|
|LQD||iShares iBoxx USD Investment Grade Corporate Bond ETF||13,558.96|
|USMV||iShares MSCI USA Min Vol Factor ETF||8,170.31|
|GLD||SPDR Gold Trust||8,054.11|
|SPY||SPDR S&P 500 ETF Trust||6,027.67|
|HYG||iShares iBoxx USD High Yield Corporate Bond ETF||5,985.72|
|JNK||SPDR Bloomberg Barclays High Yield Bond ETF||3,428.79|
|SHV||iShares Short Treasury Bond ETF||3,400.44|
|IWF||iShares Russell 1000 Growth ETF||2,449.55|
|EFAV||iShares MSCI EAFE Min Vol Factor ETF||2,432.44|
|IVW||iShares S&P 500 Growth ETF||2,241.99|
Data as of July 27, 2021
However, the iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD) saw outflows of $14 billion, becoming the largest loser so far this year amid broader volatility in the bond market. The fund lost almost $1.7 billion on March 4 after Fed Chairman Jerome Powell said the central bank would not step in to reduce volatility in Treasury yields, which itself was triggered by fears of overvalued equity prices.
Investors have also exited positions in low volatility funds as equity markets largely rode the reopening play earlier in the year to multiple record highs. The iShares MSCI USA Min Vol Factor ETF (USMV) and the iShares MSCI EAFE Min Vol Factor ETF (EFAV) lost a combined $10.5 billion in assets under management so far this year.
The SPDR Gold Trust (GLD) has seen outflows of $8 billion so far this year, although it’s up by $317 million within the past three months as inflation fears mount. Those same inflation fears likely drove the $3.4 billion outflows from the iShares Short Treasury Bond ETF (SHV).
Finally, the SPDR S&P 500 ETF Trust (SPY) went in the opposite direction of its rivals VOO and IVV, to the tune of under $6 billion in year-to-date outflows. While SPY is s6basis points more expensive than the other S&P 500 tracker funds, it’s also likely affected by its status as a broader trading vehicle by day traders.