Investors Poured Billions Into IVV, TLT, BIL Last Month

Investors added $34.4 billion to U.S.-listed ETFs last month, led by U.S. equity ETFs.

U.S. stock funds pulled in $22.6 billion of inflows, followed by U.S. fixed income ETFs with $15.2 billion. 

Year-to-date outflows for all ETFs now stand at $361.9 billion, which compares to $500 billion a year ago. 

Taking a closer look at individual ETFs, the top flows gainer in October was the iShares Core S&P 500 ETF (IVV), which had $8.6 billion of inflows. The fund is the second-biggest asset gatherer of the year after the Vanguard 500 Index Fund (VOO). 

The SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) and the iShares 20+ Year Treasury Bond ETF (TLT) were also popular in October, with inflows of $6 billion and $2.9 billion, respectively. 

Those two ETFs have collected $10.6 billion and $20.1 billion, respectively, on a year-to-date basis. 

BIL and TLT lie on opposite ends of the duration spectrum, but some investors are betting on both in what’s known as a barbell strategy.  

Corporate Bond ETFs Shunned 

Meanwhile, on the outflows side of the ledger, the iShares iBoxx USD High Yield Corporate Bond ETF (HYG) led the way in October with redemptions of $2.8 billion. 

The iShares MSCI Emerging Markets ETF (EEM) and the Vanguard Intermediate Corporate Bond ETF (VCIT) were close behind, with outflows of $2.2 billion and $2.1 billion, respectively. 

Unlike Treasury bond ETFs, which have been in high demand, corporate bond ETFs have been shunned by investors this year. 

Narrow credit spreads and concerns about an economic downturn seem to be keeping ETF investors from putting their money into this segment of the bond market. 

If the economy falls into a recession, corporate bond defaults may tick up, while investors in Treasuries will be protected as debt issued by the federal government is free of credit risk.