ETFs Add $27B In Oct., Mostly US-Focused

November 03, 2014

Flows into ETFs totaled almost $27 billion in October, as 2013's asset-gathering record looks beatable.

Investors plowed almost $27 billion into ETFs last month, most of that into bond funds, though the safe-haven trade that favored fixed income in the early part of October faded as markets recovered. The S&P 500 Index swooned in early October but was up 4 percent to end the month at a record.

Fixed-income inflows, the vast majority into U.S.-focused funds, totaled almost $19 billion, while inflows into ETFs focused on equities totaled $7 billion, which included $12.6 billion into U.S-focused strategies and almost $5 billion in outflows from international funds. Framed a slightly different way, U.S. markets—fixed income and equities alike—made up almost all of October's inflows.

Concerns about global economic sluggishness fueled a pullback in markets early in the month, and that led to the sizable bond inflows. Between the S&P's recovery and the strong flows, total U.S.-listed ETFs rose 3 percent in the month to $1.919 trillion. That figure is almost 13 percent above the $1.701 in assets at the end of last year.

Asset gathering this year through October comes to $150 billion—just a bit shy of the $157 billion gathered in the same year-earlier period. It now looks quite possible that 2013's single-year asset-gathering record of $188 billion will be eclipsed in the next two months, particularly considering that the last few month of each year have historically been strong for inflows.

Indeed, it appears that investors of all kinds are waking up to the virtues of ETFs; namely, low costs, transparency, tradability and the ease with which various assets classes, geographies and investment themes can be accessed. It's becoming easy to imagine a world where ETF assets match the $3 trillion now in hedge funds and even the $15 trillion in open-end mutual funds.

October 2014 ETF Flows
Asset Class Net Flows ($M) AUM ($M) % of AUM
U.S. Equity 12,638.14 1,074,047.45 1.18%
International Equity -4,946.77 432,850.73 -1.14%
U.S. Fixed Income 18,849.44 277,740.74 6.79%
International Fixed Income 84.20 24,225.19 0.35%
Commodities -1,001.22 57,447.47 -1.74%
Currency 32.57 1,589.18 2.05%
Leveraged 1,596.77 23,173.16 6.89%
Inverse 21.48 20,146.16 0.11%
Asset Allocation 71.60 5,125.97 1.40%
Alternatives -420.29 3,022.86 -13.90%
Total: 26,925.93 1,919,368.92 1.40%

 


 

U.S. Market Shines Brightly

As noted, U.S. strategies—focused on stocks and bonds—pulled in the lion's share of assets in October. With quantitative easing ending in the U.S., and economic data trending in the right direction, it appears asset flows are turning to the U.S.

That's doubly true when you consider that central banks in both Japan and the eurozone are focused on QE, which is weakening the euro and the yen, and sending investor into assets denominated in dollars.

Last month's most popular fund was the iShares Core S&P 500 ETF (IVV | A-98). It gathered $4.4 billion.

Right behind IVV on the creations list was a trio of bond funds, including a short-dated safe-haven play and a pair of popular aggregate bond funds. All those funds appear in the table below.

October 2014 Top Gainers
Ticker Fund Issuer Flows AUM ($M) Turnover
IVV iShares Core S&P 500 BlackRock 4,421.22 67,198.94 29,390.50
SHY iShares 1-3 Year Treasury Bond BlackRock 3,480.64 11,717.15 6,725.13
AGG iShares Core U.S. Aggregate Bond BlackRock 2,177.69 21,155.03 6,342.56
BND Vanguard Total Bond Market Vanguard 1,985.13 24,105.07 6,613.09
IWM iShares Russell 2000 BlackRock 1,938.81 27,593.39 160,562.29
SHV iShares Short Treasury Bond BlackRock 1,874.42 4,222.19 3,853.56
VOO Vanguard S&P 500 Vanguard 1,847.26 24,227.43 8,473.57
HYG iShares iBoxx $ High Yield Corporate Bond BlackRock 1,660.88 14,184.32 17,268.29
XLP Consumer Staples Select SPDR SSgA 1,311.36 9,055.19 12,964.69
VTI Vanguard Total Stock Market Vanguard 1,227.93 48,347.91 8,431.39

 


 

GLD, BOND And Other Noteworthy Outflows

With net outflows from international equities totaling almost $5 billion, it's hardly a surprise that some of the ETF market's biggest foreign-focused ETFs were on the redemptions list.

Those included the iShares MSCI Emerging Markets ETF (EEM | B-97), which bled $2.6 billion, and the Vanguard FTSE Europe ETF (VGK | A-98), which lost $2.1 billion of its assets to redemptions.

One bond fund that bucked the inflows pattern last month was the PIMCO Total Return ETF (BOND | B), which, until Sept. 25, was managed by the legendary fixed-income trader and investor Bill Gross. The fund began losing money from the day Gross left. Though outflows have slowed, the fund has lost about $1 billion since that day. October redemptions totaled $620 million last month.

Gold took it on the chin last month as well. Specifically, the SPDR Gold Shares (GLD | A-100), the world's first and biggest gold bullion ETF, suffered outflows of $1.2 billion. That brings total redemptions this year to more than $2.1 billion, as the yellow metal continues to lose its allure in the face of minimal inflationary pressure throughout the global economy.

October 2014 Biggest Losers
Ticker Fund Issuer Flows AUM ($M) Turnover
QQQ PowerShares QQQ Invesco PowerShares -3,247.67 40,473.48 127,483.07
EEM iShares MSCI Emerging Markets BlackRock -2,643.61 37,010.05 74,484.04
VGK Vanguard FTSE Europe Vanguard -2,143.81 11,676.14 10,319.06
IJH iShares Core S&P Mid-Cap BlackRock -2,120.40 21,925.87 6,365.55
XLK Technology Select SPDR SSgA -1,508.85 12,495.42 13,385.89
GLD SPDR Gold SSgA -1,216.86 27,730.63 19,335.09
XLB Materials Select SPDR SSgA -1,033.96 3,934.23 14,864.86
EWU iShares MSCI United Kingdom BlackRock -786.98 3,173.46 1,832.69
HYS PIMCO 0-5 Year High Yield Corporate Bond PIMCO -636.59 3,305.20 1,733.54
BOND PIMCO Total Return PIMCO -620.22 2,501.69 1,787.49

 


 

October 2014 League Table
Issuer Net Flows AUM ($M) % of AUM Turnover
BlackRock 18,099.75 740,603.08 2.44% 624,960.35
SSgA -395.57 413,599.27 -0.10% 1,136,378.78
Vanguard 8,469.82 408,055.23 2.08% 94,534.74
Invesco PowerShares - 3,392.18 97,327.88 -3.49% 143,386.19
WisdomTree 812.22 36,741.00 2.21% 16,694.30
First Trust 95.39 29,885.66 0.32% 12,286.92
Guggenheim -182.54 28,287.74 -0.65% 10,401.90
ProShares -277.94 26,504.03 -1.05% 127,352.44
Charles Schwab 1,305.08 24,652.46 5.29% 4,922.16
Van Eck 696.84 21,774.51 3.20% 60,992.28
PIMCO - 1,333.49 12,210.45 -10.92% 5,863.91
ALPS 159.05 11,524.62 1.38% 3,190.37
Northern Trust 277.41 8,756.44 3.17% 1,001.57
Barclays Capital -173.13 8,704.07 -1.99% 63,394.84
Direxion 765.50 8,332.74 9.19% 65,195.73
JPMorgan - 6,427.01 0.00% 2,360.27
UBS 175.30 5,142.89 3.41% 1,409.99
Global X -76.77 3,871.36 -1.98% 1,158.55
Deutsche Bank 333.99 2,867.45 11.65% 1,155.93
ETF Securities -32.49 2,583.62 -1.26% 358.19
VelocityShares 770.85 2,486.30 31.00% 30,071.05
US Commodity Funds 149.48 2,408.08 6.21% 9,879.74
Fidelity 221.21 2,128.06 10.39% 1,318.29
Emerging Global Shares 17.68 1,834.01 0.96% 304.24
Credit Suisse 24.14 1,823.75 1.32% 234.23
Exchange Traded Concepts 164.50 1,753.59 9.38% 343.11
AdvisorShares -79.79 1,515.60 -5.26% 808.01
IndexIQ 51.60 1,245.64 4.14% 189.86
Merrill Lynch -53.67 1,110.86 -4.83% 210.44
RevenueShares 19.23 883.10 2.18% 147.12
RBS Securities 22.40 703.49 3.18% 128.61
Cambria -18.87 333.21 -5.66% 77.78
Highland Capital Management 97.45 316.87 30.75% 163.33
GreenHaven -4.98 315.31 -1.58% 41.15
Goldman Sachs - 219.34 0.00% 88.71
CitiGroup 51.76 193.21 26.79% 28.51
Teucrium 7.87 171.28 4.60% 189.64
Arrow Investment Advisors -24.31 166.72 -14.58% 77.11
KraneShares -6.70 120.38 -5.56% 79.21
Precidian - 85.42 0.00% 119.26
Morgan Stanley - 61.59 0.00% 11.42
Horizons 2.29 41.73 5.49% 4.46
Columbia 2.13 38.16 5.59% 4.97
Huntington Strategy Shares -2.00 20.66 -9.68% 4.61
FFCM 2.96 11.06 26.75% 7.96
LocalShares - 9.19 0.00% 0.39
Russell - 9.01 0.00% 0.90
Factor Advisor - 5.53 0.00% 3.72
Jefferies - - - -
Pax World - - - -

 

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