Investors poured nearly $23 billion into U.S.-listed ETFs in July, about half of which landed into U.S. equity funds. The monthly haul exceeded June’s $18 billion in inflows—and set year-to-date ETF creations well-positioned to match—if not exceed—last year’s record asset haul of $243 billion.
If in the first six months of the year, ETF creations were already a record; second-half ETF flows have historically been more powerful than in the first half.
Biggest ETFs Attract Inflows
The most popular ETFs in July included the three biggest S&P 500 funds. The SPDR S&P 500 (SPY | A-98), the iShares Core S&P 500 ETF (IVV | A-98) and the Vanguard S&P 500 ETF (VOO | A-99) raked in a combined $4.9 billion in assets.
“Investors really favored the safety of large-cap U.S. equities over riskier small-caps and emerging markets,” Todd Rosenbluth, director of ETF and mutual fund research at S&P Capital IQ, told ETF.com.
“It’s interesting to see the three ETFs tied to the S&P 500 Index leading the charge, since we saw international equities driving the flows earlier in the year,” he added. “Investors seem to believe that better-than-expected earnings will move the large-caps higher.”
Emerging Market & Small-Cap Outflows
Indeed, on the flip side, the least popular was the iShares MSCI Emerging Market ETF (EEM | B-99) with net redemptions of almost $2.5 billion. Those outflows came as the fund slipped more than 7 percent.
The iShares Russell 2000 ETF (IWM | A-88) was also among the month’s biggest net redemptions as investors trimmed exposure to small-caps. The outflows exceeding $1.5 billion were a complete reversal from the inflows of more than $2.12 billion seen the month prior, according to ETF.com data.
Other highlights in July included a return of appetite for U.S. fixed income—the asset class gathered more than $6.5 billion in fresh net assets in a month. The demand is most likely tied to expectations for Federal Reserve action before year-end.
Many expect the Fed to begin to raise rates in September, and July’s demand for U.S. bond funds suggests “investors continue to use ETFs as a way of tilting their portfolios,” Rosenbluth said.
The short-term bond fund iShares 1-3 Year Treasury Bond ETF (SHY | A-97) was the second-most-popular ETF in July—second only to SPY—with net creations of nearly $2 billion in the month.
On the commodity front, July was not a good month for gold investors, who saw gold prices sink more than 6 percent to a five-year low below $1,100 an ounce, and the SPDR Gold Trust (GLD | A-100) bleed more than $1 billion.
July 2015 Asset Class Data
|Net Flows ($M)||AUM ($M)||% of AUM|
|U.S. Fixed Income||6,571.90||307,369.05||2.14%|
|International Fixed Income||351.09||26,631.35||1.32%|
July 2015 Top Gainers
|SPY||SPDR S&P 500||SSgA||2,650.22||176,916.72||533,302.94|
|SHY||iShares 1-3 Year Treasury Bond||BlackRock||1,940.91||10,973.38||4,420.03|
|VOO||Vanguard S&P 500||Vanguard||1,261.77||34,247.31||7,294.39|
|HEDJ||WisdomTree Europe Hedged Equity||WisdomTree||1,205.23||21,874.41||6,809.65|
|IWB||iShares Russell 1000||BlackRock||1,123.22||12,599.79||3,110.94|
|IVV||iShares Core S&P 500||BlackRock||1,011.79||70,212.20||17,813.68|
|DBEF||Deutsche X-trackers MSCI EAFE Hedged Equity ETF||Deutsche Bank||994.93||13,583.33||2,985.22|
|XLF||Financial Select SPDR||SSgA||914.91||20,382.83||16,432.04|
|IBB||iShares Nasdaq Biotechnology||BlackRock||827.07||10,073.61||14,443.20|
|USO||United States Oil||US Commodity Funds||820.79||2,565.79||9,396.59|
July 2015 Biggest Losers
|EEM||iShares MSCI Emerging Markets||BlackRock||-2,488.20||24,615.06||45,648.21|
|IWM||iShares Russell 2000||BlackRock||-1,585.85||27,510.06||88,316.14|
|EFA||iShares MSCI EAFE||BlackRock||-732.93||61,428.38||28,248.88|
|BND||Vanguard Total Bond Market||Vanguard||-607.44||26,492.77||3,366.95|
|FXI||iShares China Large-Cap||BlackRock||-512.87||6,593.02||30,730.19|
|XLK||Technology Select SPDR||SSgA||-431.39||13,000.22||8,124.45|
|DVY||iShares Select Dividend||BlackRock||-322.85||13,760.29||1,297.96|
|AAXJ||iShares MSCI All Country Asia ex Japan||BlackRock||-314.18||3,668.68||2,005.33|
|IJH||iShares Core S&P Mid-Cap||BlackRock||-274.73||26,761.42||4,497.84|