Embracing the idea that U.S. equities may have gotten overheated, investors pulled $1.6 billion out of ETFs tied to the space, according to the latest monthly data from FactSet. At the same time, they deployed $23 billion into international equity ETFs, reasoning that valuations were more compelling for overseas stocks.
In the end, it didn't really matter. The U.S. stock market leapt to a record high during the month, while international stocks continued to blaze higher as well. Across the board, this continues to be a good year for stock market investors.
Fixed Income Attracting Flows
But curiously, despite the growing euphoria surrounding the stock market, investors also put cash into fixed-income products. U.S. fixed-income ETFs and international fixed-income ETFs had inflows of $8.9 billion and $2.2 billion, respectively, during May. Bonds have remained well-supported this year, even as central banks such the Federal Reserve and ECB attempt to tighten monetary policy.
Other than U.S. equity ETFs, the only other segments to see outflows during the month were commodity ETFs, with redemptions of $658 million; currency ETFs, with redemptions of $139 million; and inverse ETFs, with redemptions of $29 million.
Adding it all up, U.S.-listed ETFs saw inflows of $32.7 billion in total during May, bringing the year-to-date haul to $203.8 billion.
EFA Leads The Pack
Given the hefty inflows into international equity ETFs, it's unsurprising that the top 10 creations list featured seven funds from that category. Taking the top spot was the iShares MSCI EAFE ETF (EFA), with creations of just over $4 billion.
Also on the list: the iShares Core MSCI Emerging Markets ETF (IEMG), the iShares Core MSCI EAFE ETF (IEFA), the Vanguard FTSE Europe ETF (VGK), the iShares MSCI Eurozone ETF (EZU), the Vanguard FTSE Developed Markets ETF (VEA) and the Vanguard FTSE Emerging Markets ETF (VWO). Those funds had inflows ranging from $1.4 billion to $2 billion.
Aside from the plethora of international equity ETFs, two S&P 500 funds also made the cut. The Vanguard S&P 500 ETF (VOO) and the iShares Core S&P 500 ETF (IVV) had inflows of $1.9 billion and $1.8 billion, respectively, during May.
The only fixed-income product in the top 10 was the iShares iBoxx $ Investment Grade Corproate Bond ETF (LQD), with creations of $2.2 billion.
Heavy Outflows From Gold Miner ETFs
On the outflows side, two broad market U.S. equity ETFs were far and away the biggest losers. The iShares Russell 2000 ETF (IWM) and the SPDR S&P 500 ETF Trust (SPY) had redemptions of $4.9 billion and $4.7 billion, respectively.
Meanwhile, a pair of gold miner ETFs also fell out of favor. The VanEck Vectors Gold Miners ETF (GDX) and the VanEck Vectors Junior Gold Miners ETF (GDXJ) saw redemptions of $1.4 billion and $412 million, respectively. During the month, prices for spot gold were unchanged at $1,275/oz.
Other notable losers during the month included the iShares iBoxx $ High Yield Corporate Bond ETF (HYG), the SPDR Dow Jones Industrial Average ETF Trust (DIA), the Financial Select Sector SPDR Fund (XLF), the SPDR S&P Midcap 400 ETF Trust (MDY), the Technology Select Sector SPDR Fund (XLK) and the iShares U.S. Real Estate ETF (IYR). Outflows for those ETFs ranged from $500 million to $1.4 billion.
For a full list of the top inflows and outflows for May, see the tables below:
Top Gainers (May 2017)
|Ticker||Name||Issuer||Net Flows ($,mm)||AUM ($M)||% of AUM||YTD 2017 Net Flows($,M)|
|EFA||iShares MSCI EAFE ETF||BlackRock||4,047.24||75,799.28||5.64%||7,673.91|
|LQD||iShares iBoxx $ Investment Grade Corporate Bond ETF||BlackRock||2,189.79||33,924.15||6.90%||6,092.67|
|IEMG||iShares Core MSCI Emerging Markets ETF||BlackRock||1,962.90||31,407.37||6.67%||9,803.61|
|IEFA||iShares Core MSCI EAFE ETF||BlackRock||1,918.88||26,659.80||7.76%||8,081.34|
|VOO||Vanguard S&P 500 ETF||Vanguard||1,851.62||68,749.14||2.77%||7,407.51|
|VGK||Vanguard FTSE Europe ETF||Vanguard||1,825.33||14,565.72||14.33%||1,971.05|
|EZU||iShares MSCI Eurozone ETF||BlackRock||1,789.76||12,654.66||16.47%||3,861.25|
|IVV||iShares Core S&P 500 ETF||BlackRock||1,783.74||112,567.38||1.61%||14,237.34|
|VEA||Vanguard FTSE Developed Markets ETF||Vanguard||1,763.33||53,678.44||3.40%||7,614.58|
|VWO||Vanguard FTSE Emerging Markets ETF||Vanguard||1,443.96||55,071.71||2.69%||4,672.86|
Top Gainers (Year-to-Date)
|Ticker||Name||Issuer||Net Flows ($,mm)||AUM ($M)||% of AUM||May 2017 Net Flows($,M)|
|IVV||iShares Core S&P 500 ETF||BlackRock||14,237.34||112,567.38||14.48%||1,783.74|
|IEMG||iShares Core MSCI Emerging Markets ETF||BlackRock||9,803.61||31,407.37||45.38%||1,962.90|
|IEFA||iShares Core MSCI EAFE ETF||BlackRock||8,081.34||26,659.80||43.50%||1,918.88|
|EFA||iShares MSCI EAFE ETF||BlackRock||7,673.91||75,799.28||11.26%||4,047.24|
|VEA||Vanguard FTSE Developed Markets ETF||Vanguard||7,614.58||53,678.44||16.53%||1,763.33|
|VOO||Vanguard S&P 500 ETF||Vanguard||7,407.51||68,749.14||12.08%||1,851.62|
|LQD||iShares iBoxx $ Investment Grade Corporate Bond ETF||BlackRock||6,092.67||33,924.15||21.89%||2,189.79|
|VWO||Vanguard FTSE Emerging Markets ETF||Vanguard||4,672.86||55,071.71||9.27%||1,443.96|
|VTI||Vanguard Total Stock Market ETF||Vanguard||4,223.74||79,145.37||5.64%||927.46|
|EZU||iShares MSCI Eurozone ETF||BlackRock||3,861.25||12,654.66||43.91%||1,789.76|