International equities, and currency-hedged strategies in particular, dominated ETF inflows in the first half of 2015. Net inflows totaled a record $101 billion, and total U.S.-listed ETF assets stood at $2.118 trillion at the end of June—6 percent higher than at the end of 2014, and 14 percent higher than a year ago.
Currency hedging has been all the rage, as we’ve writing about all year, with the most popular ETF being the eurozone-focused WisdomTree Europe Hedged Equity Fund (HEDJ | B-45). HEDJ has pulled in almost $14 billion so far this year, lifting its assets to nearly $20 billion, according to data compiled by ETF.com.
For U.S. investors grappling with dollar strength, funds like HEDJ have protected solid returns, up more than 14 percent this year. Without that currency hedge that peels out euro weakness, a fund with HEDJ’s holdings would have returned less than 6 percent. HEDJ is also far outperforming the U.S. broad market: The SPDR S&P 500 (SPY | A-98) is barely above zero through June 30.
2015 First Half Flows By Asset
| Net Flows ($M) | AUM ($M) | % of AUM | |
| U.S. Equity | -17,666.49 | 1,155,775.66 | -1.53% |
| International Equity | 90,161.54 | 525,646.59 | 17.15% |
| U.S. Fixed Income | 20,130.83 | 300,073.34 | 6.71% |
| International Fixed Income | 3,109.47 | 26,331.49 | 11.81% |
| Commodities | 1,106.70 | 55,730.56 | 1.99% |
| Currency | 226.73 | 1,482.61 | 15.29% |
| Leveraged | 979.32 | 24,360.84 | 4.02% |
| Inverse | 1,375.87 | 19,037.82 | 7.23% |
| Asset Allocation | 839.48 | 5,874.78 | 14.29% |
| Alternatives | 1,110.57 | 3,702.98 | 29.99% |
| Total | 101,374.01 | 2,118,016.67 | 4.79% |
2015 First Half Top Gainers
| Ticker | Fund | Issuer | Flows | AUM ($M) | Turnover |
| HEDJ | WisdomTree Europe Hedged Equity | WisdomTree | 13,969.81 | 19,765.15 | 44,687.00 |
| DBEF | Deutsche X-trackers MSCI EAFE Hedged Equity ETF | Deutsche Bank | 10,456.74 | 12,153.98 | 16,993.59 |
| EFA | iShares MSCI EAFE | BlackRock | 5,884.69 | 60,941.33 | 155,826.69 |
| VTI | Vanguard Total Stock Market | Vanguard | 4,770.37 | 56,151.79 | 37,947.94 |
| VOO | Vanguard S&P 500 | Vanguard | 4,671.37 | 32,281.71 | 40,502.27 |
| DXJ | WisdomTree Japan Hedged Equity | WisdomTree | 4,180.81 | 18,153.86 | 37,841.97 |
| EWJ | iShares MSCI Japan | BlackRock | 3,239.88 | 19,591.27 | 49,861.20 |
| VGK | Vanguard FTSE Europe | Vanguard | 2,777.32 | 14,242.75 | 36,627.96 |
| EWG | iShares MSCI Germany | BlackRock | 2,707.50 | 7,178.74 | 21,649.57 |
| HEFA | iShares Currency Hedged MSCI EAFE | BlackRock | 2,659.03 | 2,719.08 | 4,831.87 |
