Risk-On Feb. As ETF Assets Reach Record

March 03, 2014

ETF assets reached a record in February as markets rediscovered their post-crash appetite for risk assets.

Investors poured more than $19 billion into ETFs last month, as investment markets pivoted midmonth from a “risk-off” flavor early on to a return of the “risk-on” sentiment that has favored stocks since the market recovery from the crash of 2008 first began.

Total U.S.-listed ETF assets reached a record $1.727 trillion, or more than 5 percent higher than in January, and more than 21 percent higher than at the end of the same year-earlier period, according to data compiled by ETF.com Analytics. Most of the $19.45 billion in inflows was into bonds, and physical gold funds gathered assets as well. But equities also managed to pull in assets after the tide had turned.

The S&P 500 Index began February with a continuation of its January swoon. But once sentiment changed, the S&P 500 retraced losses and finished the month 4.5 percent higher and at a record high, helping pump up ETF assets along with the net inflows.

That shift in sentiment was linked in part to comments by new Federal Reserve Chair Janet Yellen a bit more than a week into February that the central bank remained committed to “tapering” five years of “quantitative easing.” The declaration seemed enough to end a correction that began to take shape early this year amid concern global growth and a recovery in the U.S. jobs market was faltering.

Apart from the quite-sudden shift in markets, the flows and asset record demonstrate the growing popularity of ETFs. Investors are using ETFs more and more, valuing them for the cheap, transparent and efficient ways they afford access to pockets narrow and wide of the investment universe. In fact, flows into and out of ETFs have become one of the more reliable ways to read the tea leaves in markets.

Flows By Asset Class Feb. 2014 ($,M) Net Flows AUM % of AUM
U.S. Equity 1,660.55 933,579.56 0.18%
International Equity 1,876.14 405,247.61 0.46%
U.S. Fixed Income 13,803.37 247,222.87 5.58%
International Fixed Income 329.62 21,246.97 1.55%
Commodities 689.46 68,153.63 1.01%
Currency -113.97 1,904.47 -5.98%
Leveraged -592.40 21,399.64 -2.77%
Inverse 1,373.18 20,258.21 6.78%
Asset Allocation 484.05 4,459.01 10.86%
Alternatives - 58.27 3,487.38 -1.67%
Total: 19,451.76 1,726,959.37 1.13%

 

 


Individual Funds

The first and biggest ETF, the SPDR S&P 500 ETF (SPY | A-97) bled about $2.8 billion in assets in February. But equities as an asset class eked out net inflows of $3.5 billion, including $1.7 billion in U.S. stocks. The shift from outflows to inflows for SPY and equities in general is evident in ETF.com’s weekly flows data in February. SPY has $158 billion in assets, or 9 percent of the $1.727 trillion grand total.

From an individual fund perspective, the lion’s share of inflows were concentrated on fixed-income strategies, a vestige of the sizable inflows early in the month based on a “risk-off” sentiment that had returned to markets in January. But as the tide shifted and began favoring stocks over bonds, fixed-income flows merely slowed, but didn’t reverse.

By the end of the month, fixed income as a whole hauled in more than $14 billion in fresh assets, $13.8 billion of which was invested in different pocket of the U.S. bond market. The three most popular ETFs last month were all fixed-income funds. Those ETFs include:

  • iShares 3-7 Year Treasury Bond ETF (IEI | A-74), inflows of $3.7 billion, and month-end assets of $6.3 billion
  • iShares 1-3 Year Treasury Bond ETF (SHY | A-97), inflows of $3.54 billion, and month-end assets of $11.75 billion
  • ProShares Ultra 7-10 Year Treasury ETF (UST), a double-exposure leverage fund with notoriously “hot” assets, pulled in $2.92 billion and ended February with $2.95 billion

SPDR Gold Shares (GLD | A-100), the world’s biggest physical bullion ETF, pulled in more than $2 billion in February, its first positive flows in months that reflected the return of economic anxiety early in the month.

Conversely, the least popular ETFs last month were all focused on equities, notwithstanding the fact that equities as an asset class—again—ended up with net inflows by the end of the month.

Top Gainers Feb. 2014 ($,M)
Ticker Fund Issuer Flows AUM Turnover
IEI iShares 3-7 Year Treasury Bond BlackRock 3,724.07 6,313.12 5,292.79
SHY iShares 1-3 Year Treasury Bond BlackRock 3,542.14 11,752.45 7,096.21
UST ProShares Ultra 7-10 Year Treasury ProShares 2,921.81 2,950.85 4,317.36
QQQ PowerShares QQQ Invesco PowerShares 1,748.21 46,704.66 66,319.58
IWM iShares Russell 2000 BlackRock 1,516.37 27,211.76 100,213.66
CSJ iShares 1-3 Year Credit Bond BlackRock 1,169.75 13,225.42 2,434.73
VNQ Vanguard REIT Vanguard 1,028.90 20,419.80 5,891.12
LQD iShares iBoxx $ Investment Grade Corporate Bond BlackRock 949.72 16,897.69 3,535.15
MDY SPDR S&P MidCap 400 SSgA 920.75 15,960.77 17,685.66
XLF Financial Select SPDR SSgA 764.29 17,190.40 18,986.54
Biggest Losers Feb. 2014 ($,M)
Ticker Fund Issuer Flows AUM Turnover
IJH iShares Core S&P Mid-Cap BlackRock - 2,946.88 20,652.72 6,565.04
IVV iShares Core S&P 500 BlackRock - 2,837.45 49,911.33 21,301.74
SPY SPDR S&P 500 SSgA - 2,821.02 158,175.35 451,182.30
EEM iShares MSCI Emerging Markets BlackRock - 2,081.33 30,907.26 62,514.57
SSO ProShares Ultra S&P 500 ProShares - 1,638.37 1,619.44 16,238.50
XLK Technology Select SPDR SSgA - 1,561.70 12,138.54 5,895.59
MVV ProShares Ultra MidCap 400 ProShares - 1,533.42 163.72 2,155.83
XLY Consumer Discretionary Select SPDR SSgA - 943.68 5,410.13 8,852.95
XLP Consumer Staples Select SPDR SSgA - 872.93 5,603.65 7,369.12
VIG Vanguard Dividend Appreciation Vanguard - 661.12 18,712.82 2,008.78

 

 

 


 

Feb 2014 League Table ($,M)
Issuer Net Flows AUM % of AUM Turnover
BlackRock 9,903.50 672,258.56 1.47% 418,279.55
SSgA - 2,221.68 378,881.84 -0.59% 651,178.89
Vanguard 3,562.85 345,191.50 1.03% 64,123.63
Invesco PowerShares 2,491.27 101,340.83 2.46% 77,513.44
WisdomTree -0.26 33,945.05 0.00% 10,513.07
ProShares 148.83 27,097.20 0.55% 88,623.40
Guggenheim 1,274.13 24,143.36 5.28% 6,298.35
Van Eck 324.40 23,691.66 1.37% 32,044.80
First Trust 1,019.77 23,057.59 4.42% 7,964.74
Charles Schwab 642.65 18,433.45 3.49% 2,906.85
PIMCO 821.31 14,457.64 5.68% 3,280.71
ALPS 216.27 9,002.56 2.40% 1,379.36
Barclays Capital - 115.02 7,840.35 -1.47% 37,665.69
Northern Trust 299.54 7,339.52 4.08% 686.03
Direxion -21.33 7,118.83 -0.30% 48,844.15
JPMorgan   5,905.02 0.00% 525.21
UBS 142.52 4,249.31 3.35% 637.09
Global X 136.45 3,303.49 4.13% 943.44
ETF Securities -19.08 3,039.48 -0.63% 402.70
US Commodity Funds 12.12 2,212.65 0.55% 15,918.49
VelocityShares 394.34 1,860.09 21.20% 17,224.46
Emerging Global Shares -28.33 1,440.46 -1.97% 305.06
AdvisorShares 182.25 1,419.99 12.83% 466.36
Deutsche Bank 39.64 1,329.16 2.98% 325.63
Merrill Lynch -15.51 1,248.56 -1.24% 194.20
Exchange Traded Concepts 76.53 1,156.63 6.62% 150.68
Credit Suisse 42.51 1,048.10 4.06% 107.78
IndexIQ 15.26 971.10 1.57% 153.45
Fidelity 46.31 840.31 5.51% 315.58
RevenueShares -14.05 728.12 -1.93% 100.20
RBS Securities 10.95 584.55 1.87% 79.86
GreenHaven 12.43 343.33 3.62% 53.39
Goldman Sachs   258.82 0.00% 6.49
Cambria   256.60 0.00% 49.39
Highland Capital Management 9.96 139.44 7.14% 22.85
Teucrium 53.57 125.57 42.66% 171.20
Precidian -7.69 121.50 -6.33% 206.66
Arrow Investment Advisors 1.97 99.34 1.98% 28.85
KraneShares 1.82 68.14 2.68% 49.75
Jefferies   67.36 0.00% 3.39
Pax World 4.32 65.08 6.64% 6.63
Morgan Stanley   63.53 0.00% 21.96
Columbia 2.10 34.87 6.03% 9.49
Huntington Strategy Shares   31.08 0.00% 489.64
Horizons   30.91 0.00% 8.35
CitiGroup   29.33 0.00% 9.49
Russell   8.99 0.00% 1.77
FFCM   6.75 0.00% 1.54
LocalShares   6.75 0.00% 8.44
Factor Advisor 2.78 5.32 52.13% 9.61

Find your next ETF

Reset All