Investor appetite for risk seems to have returned in April.
Investors poured more than $20 billion into U.S.-listed ETFs in April—a third more than in the entire first quarter—pushing total ETF assets to a record high of $1.762 trillion. The bulk of those assets landed in equities funds, particularly emerging market ETFs, signaling that appetite for risk is back on.
For most of the first quarter, flows into equity ETFs had been relatively muted as investors grappled with downdrafts in the U.S. stock market and worried about global issues, such as the territorial conflict brewing between Russia and Ukraine, and slowing Chinese consumption.
But April brought back investors’ appetite for risk; namely, emerging markets. Funds like the iShares MSCI Emerging Markets ETF (EEM | B-100) and the Vanguard FTSE Emerging Markets ETF (VWO | C-90) were among the month’s most popular strategies, raking in $3.9 billion and $651 million, respectively. EEM was the top gainer in the month.
“The opportunity is definitely in emerging markets, because valuations are at the biggest discounts to the developed world in at least a decade,” Tyler Mordy, of Hahn Investment Stewards, said in a recent interview.
Specific Fund Flows
Beyond emerging markets, a broad range of U.S. equity funds were found among ETF.com’s tally of top creations. Among them, the three major S&P 500-linked funds such as the SPDR S&P 500 (SPY | A-98), the iShares Core S&P 500 ETF (IVV | A-97) and the Vanguard S&P 500 ETF (VOO | A-96) raked in $2.4 billion, $1.6 billion and $1.0 billion, respectively.
There were no fixed-income ETFs among the month’s top gainers, but a separate look at fixed-income flows alone shows that in that space too emerging markets played a central role.
In the past month, more than $1.1 billion flowed into international bond ETFs—roughly twice the asset flows seen into the segment in the entire first quarter—and it was emerging market sovereign debt funds that led in net creations, attracting $671 million in April.
The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB | B-24)—the largest passively managed dollar-denominated emerging debt portfolio, with more than $4.3 billion in total assets—led in net creations, with $553 million in inflows.
Off Of Record-Inflows Pace
In a broader sense, the pace of flows into ETFs this year is lagging that of 2013, when total net inflows topped $188 billion for the year—a record. So far this year, investors have poured slightly more than $35 billion into U.S.-listed ETFs, about a third of which landed in fixed-income funds.
The record assets of $1.762 trillion are up 3.5 percent year-to-date from $1.701 trillion, and 18.2 percent above the $1.490 trillion at the end of the same year-earlier month of April 2013.
Chart courtesy of StockCharts.com
| Top Gainers | |||||
| Ticker | Fund | Issuer | Flows | AUM ($, M) | Turnover |
| EEM | iShares MSCI Emerging Markets | BlackRock | 3,908.92 | 35,860.75 | 64,079.21 |
| SPY | SPDR S&P 500 | SSgA | 2,428.43 | 160,614.29 | 455,549.16 |
| IVV | iShares Core S&P 500 | BlackRock | 1,663.59 | 56,452.05 | 12,947.01 |
| XLE | Energy Select SPDR | SSgA | 1,188.42 | 10,658.65 | 23,272.97 |
| VOO | Vanguard S&P 500 | Vanguard | 1,072.92 | 17,909.49 | 4,839.60 |
| XLU | Utilities Select SPDR | SSgA | 996.31 | 6,450.71 | 13,342.52 |
| XLI | Industrial Select SPDR | SSgA | 859.11 | 9,786.87 | 12,923.99 |
| VTI | Vanguard Total Stock Market | Vanguard | 750.61 | 42,224.58 | 6,027.70 |
| VWO | Vanguard FTSE Emerging Markets | Vanguard | 651.86 | 43,267.83 | 13,987.90 |
| VTV | Vanguard Value | Vanguard | 607.08 | 13,650.45 | 1,609.26 |
| Bottom Performers | |||||
| Ticker | Fund | Issuer | Flows | AUM ($, M) | Turnover |
| QQQ | PowerShares QQQ | Invesco PowerShares | - 2,893.51 | 40,825.57 | 103,287.49 |
| GLD | SPDR Gold | SSgA | - 1,037.24 | 32,627.25 | 16,734.91 |
| IWM | iShares Russell 2000 | BlackRock | -810.83 | 26,953.52 | 131,962.56 |
| XLY | Consumer Discretionary Select SPDR | SSgA | -558.86 | 5,002.76 | 8,602.26 |
| DXJ | WisdomTree Japan Hedged Equity | WisdomTree | -523.93 | 10,571.19 | 4,793.40 |
| JNK | SPDR Barclays High Yield Bond | SSgA | -463.42 | 9,732.94 | 4,013.11 |
| TIP | iShares TIPS Bond | BlackRock | -434.98 | 12,508.80 | 2,043.67 |
| MDY | SPDR S&P MidCap 400 | SSgA | -414.03 | 15,275.95 | 9,665.07 |
| MOO | Market Vectors Agribusiness | Van Eck | -404.24 | 3,032.56 | 1,314.15 |
| IWF | iShares Russell 1000 Growth | BlackRock | -387.91 | 22,596.48 | 3,433.49 |
| Asset Classes | Net Flows ($, M) | AUM ($, M) | % of AUM |
| U.S. Equity | 8,664.45 | 954,545.54 | 0.91% |
| International Equity | 7,996.08 | 420,416.86 | 1.90% |
| U.S. Fixed Income | 2,397.49 | 246,709.72 | 0.97% |
| International Fixed Income | 1,057.79 | 22,885.70 | 4.62% |
| Commodities | - 1,006.44 | 66,015.09 | -1.52% |
| Currency | - 115.39 | 1,757.68 | -6.56% |
| Leveraged | 560.77 | 21,881.40 | 2.56% |
| Inverse | 359.23 | 20,297.24 | 1.77% |
| Asset Allocation | 157.60 | 4,442.82 | 3.55% |
| Alternatives | 95.00 | 3,091.55 | 3.07% |
| Total: | 20,166.59 | 1,762,043.60 | 1.14% |
| April 2014 League Table | ||||
| Issuer | Net Flows | AUM ($,M) | % of AUM | Turnover |
| BlackRock | 8,195.37 | 683,091.03 | 1.20% | 446,658.91 |
| SSgA | 4,662.22 | 385,980.51 | 1.21% | 655,707.10 |
| Vanguard | 5,839.09 | 359,453.09 | 1.62% | 62,900.63 |
| Invesco PowerShares | - 2,935.26 | 96,841.76 | -3.03% | 113,498.80 |
| WisdomTree | -299.81 | 33,388.63 | -0.90% | 9,908.39 |
| ProShares | 534.94 | 27,412.44 | 1.95% | 89,159.42 |
| Guggenheim | 751.78 | 25,061.23 | 3.00% | 6,789.32 |
| First Trust | 666.14 | 24,361.33 | 2.73% | 6,205.31 |
| Van Eck | -215.67 | 23,390.48 | -0.92% | 33,654.96 |
| Charles Schwab | 552.07 | 19,635.29 | 2.81% | 2,941.38 |
| PIMCO | 49.34 | 14,708.15 | 0.34% | 2,405.55 |
| ALPS | 430.75 | 9,978.92 | 4.32% | 1,672.82 |
| Barclays Capital | 234.30 | 8,498.66 | 2.76% | 33,135.56 |
| Northern Trust | 136.14 | 7,850.49 | 1.73% | 400.39 |
| Direxion | 123.66 | 7,259.22 | 1.70% | 49,142.23 |
| JPMorgan | - | 6,102.36 | 0.00% | 541.65 |
| UBS | 218.70 | 4,674.62 | 4.68% | 883.99 |
| Global X | 187.85 | 3,546.40 | 5.30% | 1,148.39 |
| ETF Securities | - 1.20 | 2,975.37 | -0.04% | 373.62 |
| US Commodity Funds | 30.42 | 2,083.34 | 1.46% | 6,844.35 |
| AdvisorShares | 159.54 | 1,721.80 | 9.27% | 550.18 |
| VelocityShares | 122.96 | 1,715.69 | 7.17% | 10,379.79 |
| Emerging Global Shares | 122.10 | 1,582.21 | 7.72% | 322.51 |
| Deutsche Bank | 170.10 | 1,514.98 | 11.23% | 423.48 |
| Merrill Lynch | 18.21 | 1,360.61 | 1.34% | 126.95 |
| Exchange Traded Concepts | 65.81 | 1,348.61 | 4.88% | 156.04 |
| Credit Suisse | 73.54 | 1,188.78 | 6.19% | 146.90 |
| Fidelity | 190.89 | 1,050.68 | 18.17% | 482.05 |
| IndexIQ | 23.79 | 1,016.49 | 2.34% | 167.34 |
| RevenueShares | 19.24 | 768.10 | 2.50% | 106.15 |
| RBS Securities | - | 616.65 | 0.00% | 103.45 |
| GreenHaven | 4.22 | 359.21 | 1.17% | 33.49 |
| Cambria | 23.08 | 294.89 | 7.83% | 74.96 |
| Goldman Sachs | - | 261.64 | 0.00% | 10.08 |
| Highland Capital Management | 19.81 | 168.90 | 11.73% | 38.79 |
| Teucrium | -24.25 | 137.41 | -17.65% | 183.25 |
| Arrow Investment Advisors | 14.16 | 128.99 | 10.98% | 25.43 |
| Precidian | - | 116.46 | 0.00% | 74.18 |
| KraneShares | - 5.72 | 78.06 | -7.33% | 58.35 |
| CitiGroup | 7.52 | 65.00 | 11.57% | 6.59 |
| Morgan Stanley | - | 64.66 | 0.00% | 3.42 |
| Horizons | - | 36.65 | 0.00% | 26.26 |
| Columbia | - 2.09 | 31.49 | -6.64% | 18.39 |
| Huntington Strategy Shares | - 0.85 | 29.82 | -2.86% | 77.76 |
| FFCM | 3.87 | 10.76 | 35.94% | 24.17 |
| Russell | - | 9.07 | 0.00% | 8.65 |
| LocalShares | - | 6.64 | 0.00% | 5.74 |
| Factor Advisor | 1.10 | 6.13 | 17.87% | 3.92 |
| Jefferies | - | - | - | - |
| Pax World | - | - | - | - |
