Risk Appetite Fuels Strong August ETF Flows

September 01, 2016

Investors poured a net of $28.5 billion into U.S.-listed ETFs in August—the second-strongest month this year for ETF creations so far in 2016—and almost half of those assets landed in U.S. equity funds.

August asset flows confirmed the ongoing rise in investor appetite for risk. Earlier this year, it was U.S. fixed income and gold ETFs that were dominating asset gains, marking 2016 as the year of the safe-haven investment.

But in the past few months, there’s been a noticeable reversal in asset flows. Risk-type assets such as U.S. and international equity ETFs are increasingly popular. In August, the two most popular equity sectors were financials and energy, capturing $1.4 billion and $1.1 billion, respectively. Technology, too, was finally in the black after three months of net outflows, according to FactSet data. These aren’t defensive-type sectors.

Demand For Emerging Markets ETFs

Another clear indication of a growing appetite for risk was inflows into emerging market ETFs, which attracted nearly $5 billion in the month. The most popular ETF in August was the iShares MSCI Emerging Markets ETF (EEM), raking in a net of $2.2 billion, bringing its year-to-date net asset gains to $6.7 billion.

The Vanguard FTSE Emerging Markets ETF (VWO) and the iShares Core MSCI Emerging Markets ETF (IEMG) were also among the month’s top 10 creations.

While there’s been some brewing concern that the rally in Treasurys—as well as in gold—may be coming to an end, demand for U.S. fixed income is still relatively strong. The asset class raked in more than $8 billion last month, with funds such as the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and the iShares Core U.S. Aggregate Bond ETF (AGG) both making into the top 10 creations list.

Gold Feels The Pinch

The same cannot be said for gold. The SPDR Gold Trust (GLD) saw net redemptions of $613 million in August. As a segment, commodities—led by gold—saw its first month in the red in terms of asset flows since April, according to FactSet.

GLD remains, however, the top asset gathered of 2016 thus far, with net creations of $11.9 billion.

Currency-Hedged ETFs In The Line Of Fire

The once-hot WisdomTree Japan Hedged Equity ETF (DXJ) continues to be the target of asset losses as investors trim exposure to Japan and currency-hedged strategies, in general, in the face of dollar weakness, among other things.

In August, DXJ bled $1.1 billion in assets—the month’s biggest net redemptions of any ETF—putting its year-to-date asset losses at $5.6 billion.

The only ETF that has been less popular than DXJ so far in 2016 is the WisdomTree Europe Hedged Equity Fund (HEDJ), which has now lost $6.8 billion to net redemptions in 2016.

The two ETFs have now lost more than $12 billion in asset outflows for their issuer, WisdomTree—a firm whose name has become synonymous with currency-hedging and dividend-focused methodologies.

Growth On Pace

In aggregate, August asset flows were solid, if much smaller than July’s $52 billion intake. So far this year, the U.S. ETF industry has gathered a net of $143.2 billion in fresh assets, in line with last year’s asset growth. 

Top Gainers (August 2016)

Ticker Fund Issuer Net Flows ($,M) AUM ($M) % of AUM YTD 2016 Net Flows ($,M)
EEM iShares MSCI Emerging Markets ETF BlackRock 2,191.26 31,030.19 7.06% 6,678.00
VOO Vanguard S&P 500 Index Fund Vanguard 1,677.24 51,228.83 3.27% 7,727.54
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF BlackRock 1,352.75 33,085.07 4.09% 6,798.38
VWO Vanguard FTSE Emerging Markets ETF Vanguard 1,282.40 42,387.16 3.03% 2,996.07
IEMG iShares Core MSCI Emerging Markets ETF BlackRock 1,151.04 16,085.83 7.16% 4,801.26
AGG iShares Core U.S. Aggregate Bond ETF BlackRock 989.26 41,285.64 2.40% 9,238.48
QQQ PowerShares QQQ Trust Invesco PowerShares 947.81 39,695.87 2.39% -4,146.29
XLE Energy Select Sector SPDR Fund SSGA 906.63 15,034.65 6.03% 1,590.25
IVV iShares Core S&P 500 ETF BlackRock 887.50 78,746.27 1.13% 3,506.70
XLI Industrial Select Sector SPDR Fund SSGA 859.01 7,769.11 11.06% 1,110.17

 

Top Gainers (Year-to-Date)

Ticker Fund Issuer Net Flows ($,M) AUM ($M) % of AUM August 2016 Net Flows ($,M)
GLD SPDR Gold Trust SSGA 11,917.27 39,960.31 29.82% -612.84
AGG iShares Core U.S. Aggregate Bond ETF BlackRock 9,238.48 41,285.64 22.38% 989.26
VOO Vanguard S&P 500 Index Fund Vanguard 7,727.54 51,228.83 15.08% 1,677.24
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF BlackRock 6,798.38 33,085.07 20.55% 1,352.75
EEM iShares MSCI Emerging Markets ETF BlackRock 6,678.00 31,030.19 21.52% 2,191.26
VEA Vanguard FTSE Developed Markets ETF Vanguard 6,420.39 36,143.24 17.76% 723.04
USMV iShares Edge MSCI Min Vol USA ETF BlackRock 6,243.16 14,596.59 42.77% -425.91
SPY SPDR S&P 500 ETF Trust SSGA 6,068.92 200,431.16 3.03% 819.94
IEMG iShares Core MSCI Emerging Markets ETF BlackRock 4,801.26 16,085.83 29.85% 1,151.04
VNQ Vanguard REIT Index Fund Vanguard 4,562.79 35,390.39 12.89% 311.51

 

 

 

Biggest Losers (August 2016)

Ticker Fund Issuer Net Flows ($,M) AUM ($M) % of AUM YTD 2016 Net Flows ($,M)
DXJ  WisdomTree Japan Hedged Equity Fund WisdomTree -1,095.19 6,862.26 -15.96% -5,670.67
GLD  SPDR Gold Trust SSGA -612.84 39,960.31 -1.53% 11,917.27
TLT  iShares 20+ Year Treasury Bond ETF BlackRock -572.08 7,939.25 -7.21% 633.39
HEDJ WisdomTree Europe Hedged Equity Fund WisdomTree -551.35 9,642.97 -5.72% -6,865.83
EZU iShares MSCI Eurozone ETF BlackRock -543.69 8,329.00 -6.53% -5,519.23
DBEF Deutsche X-trackers MSCI EAFE Hedged Equity ETF Deutsche Bank -475.23 9,989.81 -4.76% -2,713.72
HYG  iShares iBoxx $ High Yield Corporate Bond ETF BlackRock -473.07 16,455.23 -2.87% 688.98
EFA  iShares MSCI EAFE ETF BlackRock -458.66 59,547.54 -0.77% 159.85
USMV  iShares Edge MSCI Min Vol USA ETF BlackRock -425.91 14,596.59 -2.92% 6,243.16
DBEU Deutsche X-trackers MSCI Europe Hedged Equity ETF Deutsche Bank -396.67 2,635.61 -15.05% -1,092.85

 

Biggest Losers (Year-to-Date)

Ticker Fund Issuer YTD 2016 Net Flows ($,M) YTD 2016 AUM ($,M) % of AUM August 2016 Net Flows ($,M)
HEDJ WisdomTree Europe Hedged Equity Fund WisdomTree -6,865.83 9,642.97 -71.20% -551.35
DXJ WisdomTree Japan Hedged Equity Fund WisdomTree -5,670.67 6,862.26 -82.64% -1,095.19
EZU iShares MSCI Eurozone ETF BlackRock -5,519.23 8,329.00 -66.27% -543.69
EWJ iShares MSCI Japan ETF BlackRock -5,512.13 13,909.98 -39.63% 23.37
QQQ PowerShares QQQ Trust Invesco PowerShares -4,146.29 39,695.87 -10.45% 947.81
XLF Financial Select Sector SPDR Fund SSGA -3,213.84 16,307.40 -19.71% 471.23
DBEF Deutsche X-trackers MSCI EAFE Hedged Equity ETF Deutsche Bank -2,713.72 9,989.81 -27.16% -475.23
VGK Vanguard FTSE Europe ETF Vanguard -2,694.38 11,758.67 -22.91% -80.62
IWF iShares Russell 1000 Growth ETF BlackRock -2,534.21 30,352.21 -8.35% 93.75
EWG iShares MSCI Germany ETF BlackRock -2,234.57 3,622.95 -61.68% -285.82

 

Asset Classes (August 2016)

  Net Flows ($,M) AUM ($M) % of AUM
U.S. Equity 13,713.57 1,332,436.62 1.03%
International Equity 4,837.51 504,580.03 0.96%
U.S. Fixed Income 8,130.91 404,594.90 2.01%
International Fixed Income 1,524.35 40,790.58 3.74%
Commodities -497.17 73,312.68 -0.68%
Currency -107.17 1,409.60 -7.60%
Leveraged -265.15 24,116.62 -1.10%
Inverse 601.17 19,926.31 3.02%
Asset Allocation 169.62 6,451.24 2.63%
Alternatives 489.06 4,564.17 10.72%
Total: 28,596.70 2,412,182.76 1.19%

 

Asset Classes (Year-to-Date)

  Net Flows ($,M) AUM ($M) % of AUM
U.S. Equity 49,132.34 1,332,436.62 3.69%
International Equity -1,239.49 504,580.03 -0.25%
U.S. Fixed Income 60,389.39 404,594.90 14.93%
International Fixed Income 9,764.51 40,790.58 23.94%
Commodities 17,196.32 73,312.68 23.46%
Currency -16.81 1,409.60 -1.19%
Leveraged -1,025.58 24,116.62 -4.25%
Inverse 6,512.58 19,926.31 32.68%
Asset Allocation -7.16 6,451.24 -0.11%
Alternatives 2,525.80 4,564.17 55.34%
Total: 143,231.90 2,412,182.76 5.94%

 

 

 

August 2016 League Table

Issuer Net Flows ($,M) AUM ($M) % of AUM YTD 2016 Net Flows ($,M)
Academy Funds 0.00 37.18 0.00% -23.40
AccuShares 0.84 6.00 14.07% 3.31
AdvisorShares 5.91 1,180.21 0.50% 78.47
Alpha Architect 2.41 132.11 1.83% 43.20
AlphaClone -1.05 4.09 -25.54% 1.93
AlphaMark Advisors 0.00 24.32 0.00% -6.84
ALPS 449.30 11,805.68 3.81% 1,104.53
Amplify 0.00 2.73 0.00% 0.00
Aptus Capital Advisors 1.29 17.69 7.26% 15.22
ARK 3.11 54.04 5.76% 4.06
Arrow Investment Advisors 2.81 117.84 2.39% -7.92
Barclays Capital 335.98 7,224.31 4.65% 1,509.87
BlackRock 10,618.30 933,916.45 1.14% 54,502.17
Cambria 3.60 293.76 1.23% -32.60
Charles Schwab 1,117.39 52,526.30 2.13% 9,495.08
CitiGroup 0.00 246.75 0.00% 0.00
Columbia 0.00 28.92 0.00% -0.10
Credit Suisse 30.05 1,812.76 1.66% 38.73
CSOP 0.00 8.19 0.00% -15.95
Deutsche Bank -822.90 15,909.34 -5.17% -4,025.69
Diamond Hill -1.25 17.46 -7.15% 1.01
Direxion 490.26 10,227.42 4.79% 434.71
Elkhorn 3.84 15.51 24.73% 10.11
Emerging Global Shares 12.18 986.28 1.23% -46.59
ETF Managers Group 12.86 899.96 1.43% -157.43
ETF Securities 64.67 2,482.02 2.61% 266.53
Exchange Traded Concepts -32.19 2,087.56 -1.54% 181.05
Fidelity -51.92 4,190.37 -1.24% 207.96
First Trust 761.85 39,679.79 1.92% -3,780.21
FQF Trust 22.91 376.33 6.09% 288.66
Franklin ETF Trust 0.00 272.94 0.00% -22.01
Global X 110.38 3,797.26 2.91% 324.19
Goldman Sachs 343.61 2,379.02 14.44% 1,323.66
Guggenheim 54.14 29,659.95 0.18% -339.70
Highland Capital Management -5.46 396.41 -1.38% 92.28
HSBC -0.04 26.81 -0.15% -0.79
IndexIQ 129.23 2,167.16 5.96% 509.80
Invesco PowerShares 1,513.65 105,697.60 1.43% 3,378.05
Janus 4.43 85.90 5.16% -14.40
John Hancock 82.46 549.84 15.00% 405.52
JPMorgan 92.09 4,520.99 2.04% 518.68
KraneShares 48.26 268.66 17.96% 38.62
Lattice Strategies 2.46 91.42 2.69% 12.96
Legg Mason 4.44 98.73 4.50% 76.14
LocalShares -1.36 9.39 -14.43% -1.36
Merk 5.35 161.12 3.32% 61.44
Millington Securities Inc -44.30 1,215.47 -3.64% -269.63
Montage Managers 1.12 33.99 3.29% 9.99
Morgan Stanley 0.00 - - 0.00
Northern Trust 238.42 10,249.15 2.33% 1,829.15
OppenheimerFunds 24.09 1,097.00 2.20% 14.33
Pacer Financial 6.05 675.92 0.90% 137.39
PIMCO 97.37 12,175.36 0.80% 862.15
ProShares 208.50 26,629.53 0.78% 5,496.75
Reality Shares 0.01 42.90 0.02% -4.19
Recon Capital 1.10 65.92 1.66% 17.50
Renaissance Capital 0.00 14.47 0.00% -6.42
Royal Bank of Canada -0.77 16.10 -4.81% 1.59
SSGA 3,004.78 463,542.27 0.65% 16,379.09
Strategy Shares 0.00 - - -1.74
Swedish Export Credit -18.77 392.00 -4.79% -36.15
Teucrium 12.07 157.09 7.69% 79.20
The Principal Financial Group 3.25 293.43 1.11% 232.53
TrimTabs Asset Management -0.09 13.06 -0.65% -1.14
UBS 14.58 6,005.63 0.24% 837.10
US Commodity Funds -210.60 4,677.46 -4.50% -62.24
US Global Investors -2.25 42.01 -5.34% -4.78
USCF Advisers 0.00 3.83 0.00% -1.53
Validea Capital Management 0.00 20.75 0.00% -2.35
Van Eck 1,662.73 29,766.10 5.59% 4,459.79
Vanguard 9,956.31 575,123.58 1.73% 57,069.66
VelocityShares -151.23 3,779.58 -4.00% 1,506.60
Victory Capital Management 31.81 612.93 5.19% 208.57
Virtus 27.82 439.36 6.33% 86.30
WisdomTree -1,679.23 38,605.75 -4.35% -12,058.58

 

 

 

 

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