US ETFs Hauled In $15B Flows In August

September 02, 2014

Last year's record asset haul looks less likely, even as investors kept plowing money into ETFs in August.

Investors plowed about another $15 billion into exchange-traded funds so far this month and, together with the S&P 500 Index rising to the 2,000 milestone, total assets in U.S.-listed ETFs rose 3 percent in August to a record of nearly $1.913 trillion.

Still, the pace of asset gathering for the 21-year-old ETF industry is lagging 2013. A total of about $106 billion has been hauled in year-to-date, compared with more than $131 billion in the first eight months of 2013. Indeed, it looks unlikely, but not impossible, for asset gathering this year to top last year's record level of $188 billion.

In an immediate sense, redemptions out of the biggest exchange-traded fund of all are to blame for the 2014 lag. The SPDR S&P 500 ETF (SPY | A-98) has had outflows of more than $6 billion in August and more than $14 billion in all of 2014.

The $173 billion fund makes up more than 9 percent of the $1.912 trillion assets now in ETFs. Take those redemptions off the table, and total August flows would bounce up to at least $21 billion and total 2014 flows would be around $120 billion, making the whole flows picture stronger.

More broadly, 2014 started out a bit roughly amid concern that the global recovery might be stalling, and that a long and cold winter was jeopardizing the still-delicate recovery in the U.S. More recently, Europe is looking rather vulnerable, as disinflation in the eurozone looks like it could morph into some sort of Japan-style deflationary crisis.

From an asset class perspective, inflows slightly favored fixed income, which was helped by falling bond yields. Most of the bond inflows—upward of $8 billion—were in U.S.-focused strategies and all across the yield curve and into riskier pockets such as high-yield debt.

Inflows into equities, on the other hand, were concentrated on non-U.S. strategies. Equities creations totaled about $6.8 billion in August, with almost $6.3 billion of that in internationally focused funds.

August 2014 Flows By Asset Class Net Flows ($, M) AUM ($, M) % of AUM
U.S. Equity 583.01 1,041,682.30 0.06%
International Equity 6,293.55 463,070.62 1.36%
U.S. Fixed Income 7,692.04 263,300.55 2.92%
International Fixed Income 62.83 24,942.60 0.25%
Commodities -29.63 66,067.90 -0.04%
Currency -99.68 1,545.83 -6.45%
Leveraged -332.23 22,688.95 -1.46%
Inverse 449.95 20,777.26 2.17%
Asset Allocation 487.35 5,533.00 8.81%
Alternatives -16.46 3,065.24 -0.54%
Total: 15,090.74 1,912,674.24 0.79%

 


Falling Yields And Bond Flows

This nagging sense of the possibility of another downturn has sent benchmark bond yields lower this year. The 10-year Treasury, which ended 2013 yielding exactly 3 percent, is now yielding 2.34 percent.

All this has been positive for bond ETF flows, as investors interpret the head winds as something of a green light for taking on extra interest-rate risk in the form of owning relatively longer-dated ETFs.

For example, in August, the iShares 7-10 Year Treasury Bond ETF (IEF | A-58) and the long-dated iShares 20+ Year Treasury Bond ETF (TLT | A-85) gathered $1.47 billion and $860 million, respectively. In all of 2014, IEF has pulled in almost $3.9 billion, while TLT has gathered $1.6 billion.

Apart From SPY, Equity Flows Strong

By comparison, SPY, as noted, has suffered outflows of more than $14 billion this year. But before reading doom and gloom into SPY's sizable redemptions, it's crucial to remember that SPY is the most liquid ETF, and is used for all kinds of reasons by all kinds of players.

A good reality check—and a reminder that the S&P 500 Index's record-making run this year is reflective of slowly increasing economic stability in the U.S.—are inflows into the ETF market's other two sizable S&P 500 funds.

The iShares Core S&P 500 ETF (IVV | A-98) and the Vanguard S&P 500 ETF (VOO | A-96) have pulled in $3 billion and $5.3 billion, so far this year, respectively, and, in August, each of the funds added about $1.2 billion in new assets.

On the international side, the iShares MSCI Emerging Markets ETF (EEM | B-98) added almost $900 million in August—a sign that emerging markets are coming back into favor after a major sell-off in 2013.

August 2014 Top-Gaining ETFs Issuer Flows AUM ($, M) Turnover
iShares 7-10 Year Treasury Bond BlackRock 1,472.48 7,748.42 3,724.85
Vanguard S&P 500 Vanguard 1,243.17 21,803.85 4,272.73
iShares 1-3 Year Treasury Bond BlackRock 1,225.75 9,024.69 3,165.30
iShares Core S&P 500 BlackRock 1,147.42 61,268.63 13,664.52
iShares MSCI Emerging Markets BlackRock 883.35 44,334.11 45,492.26
Consumer Staples Select SPDR SSgA 801.74 6,845.57 5,673.39
iShares MSCI Hong Kong BlackRock 788.98 3,221.11 2,012.92
Vanguard Total Stock Market Vanguard 767.09 46,625.16 4,657.87
iShares 3-7 Year Treasury Bond BlackRock 765.20 3,880.24 1,491.69
iShares iBoxx $ High Yield Corporate Bond BlackRock 764.26 12,677.94 8,002.66

 

August 2014 Biggest-Losing Funds
Ticker Fund Issuer Flows AUM ($, M) Turnover
SPY SPDR S&P 500 SSgA -6,527.71 172,701.38 357,342.91
IJH iShares Core S&P Mid-Cap BlackRock -1,350.94 21,995.28 3,836.11
EZU iShares MSCI EMU BlackRock -1,309.86 8,703.65 4,757.10
VGK Vanguard FTSE Europe Vanguard -687.46 15,573.56 6,238.48
IDU iShares U.S. Utilities BlackRock -640.63 1,143.77 1,032.44
XLU Utilities Select SPDR SSgA -639.41 5,935.07 10,453.79
OEF iShares S&P 100 BlackRock -592.55 4,473.93 1,890.70
MVV ProShares Ultra MidCap 400 ProShares -538.68 173.45 822.01
UWM ProShares Ultra Russell 2000 ProShares -515.13 181.08 1,031.50
QQQ PowerShares QQQ Invesco PowerShares -497.34 46,754.14 62,410.15

 


 

August 2014 League Table
Issuer Net Flows AUM ($M) % of AUM Turnover
BlackRock 10,734.11 737,067.39 1.46% 349,124.88
SSgA -5,111.34 407,441.08 -1.25% 514,337.84
Vanguard 5,237.96 400,342.19 1.31% 54,248.31
Invesco PowerShares -824.76 105,137.80 -0.78% 70,729.74
WisdomTree 234.20 35,731.23 0.66% 8,183.45
First Trust 740.59 29,489.71 2.51% 6,694.38
Guggenheim 384.70 28,391.86 1.35% 5,004.62
ProShares 16.00 27,364.33 0.06% 59,751.43
Van Eck 588.51 24,862.48 2.37% 29,946.24
Charles Schwab 477.50 22,954.82 2.08% 2,229.34
PIMCO -110.08 14,335.39 -0.77% 2,213.11
ALPS 281.69 11,625.10 2.42% 1,490.90
Barclays Capital 123.06 8,896.75 1.38% 28,763.93
Northern Trust 213.86 8,747.41 2.44% 472.51
Direxion 79.86 8,041.01 0.99% 34,319.77
JPMorgan 5.09 6,850.14 0.07% 800.19
UBS 56.22 5,211.26 1.08% 739.98
Global X 151.56 4,419.69 3.43% 999.88
ETF Securities -6.37 3,022.48 -0.21% 287.57
US Commodity Funds 221.07 2,557.27 8.64% 5,489.94
Deutsche Bank 183.82 2,240.00 8.21% 465.65
Credit Suisse -55.77 1,876.62 -2.97% 175.80
Emerging Global Shares 8.94 1,870.19 0.48% 164.48
VelocityShares 89.56 1,847.72 4.85% 14,091.11
AdvisorShares 70.51 1,795.92 3.93% 521.20
Fidelity 131.47 1,731.26 7.59% 542.54
Exchange Traded Concepts -19.94 1,598.10 -1.25% 133.12
Merrill Lynch -28.44 1,258.33 -2.26% 105.48
IndexIQ 37.61 1,177.10 3.20% 122.49
RevenueShares 3.84 859.39 0.45% 70.44
RBS Securities 19.35 685.31 2.82% 73.52
Cambria -0.71 374.17 -0.19% 47.41
GreenHaven - 345.21 0.00% 25.57
Goldman Sachs - 248.10 0.00% 18.30
Highland Capital Management 13.79 217.47 6.34% 34.29
Arrow Investment Advisors 10.38 194.88 5.33% 41.61
Teucrium 32.67 147.07 22.21% 142.62
KraneShares 21.65 111.43 19.43% 73.18
Precidian - 88.67 0.00% 60.70
Morgan Stanley - 70.81 0.00% 14.79
CitiGroup - 66.97 0.00% 11.91
Horizons 2.22 40.64 5.46% 3.85
Columbia - 33.74 0.00% 7.29
Huntington Strategy Shares -1.88 24.16 -7.78% 3.04
Russell - 9.36 0.00% 1.58
Factor Advisor - 9.21 0.00% 3.79
LocalShares 1.43 8.93 16.02% 1.10
FFCM 0.06 8.19 0.76% 15.22
Jefferies - - - -
Pax World - - - -

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