Vanilla Equity ETFs Dominated Investor Demand In Oct

November 02, 2016

Investors poured $20 billion into U.S.-listed ETFs in October, the bulk of which landed in vanilla-type strategies such as U.S. large-cap equity funds PowerShares QQQ Trust (QQQ), the iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 (SPY).

Together, these three ETFs alone raked in more than $5.3 billion, making them the most popular ETFs last month.

The appetite for equity also extended into international funds. The Vanguard FTSE Developed Markets ETF (VEA) and the Vanguard FTSE Emerging Markets ETF (VWO) were among the month’s top creations. In all, U.S. and international equity ETFs raked in more than $14 billion in October, putting year-to-date asset gathering for these two equity classes at a combined $70 billion.

Shifting Demand

From a U.S. sector perspective, investors shifted their demand from real estate and consumer staples—ETFs in these segments bled a combined $3-billion-plus last month—and pouring money into financials, technology and energy ETFs, according to FactSet data.

Real estate, which just became its own sector under GICS in September, is now the second-worst-performing S&P 500 sector this year, second only to health care, with a 2.7% decline.

What wasn’t popular in October were fixed-income ETFs invested in corporate bonds. The iShares iBoxx $ High Yield (HYG) and the SPDR Barclays High Yield (JNK) bled more than $600 million each, while the iShares iBoxx $ Investment Grade (LQD) lost $1.6 billion, FactSet reported.

As a whole, the U.S. ETF market has now seen roughly $177 billion in net inflows year-to-date, staying on pace with previous years’ asset growth, but not breaking any records thus far.

Contact Cinthia Murphy at [email protected]

Top Gainers (October 2016)

Ticker Name Issuer Net Flows ($,mm) AUM ($M) % of AUM YTD 2016 Net Flows($,M)
QQQ PowerShares QQQ Trust Invesco PowerShares 2,000.30 40,745.11 5.16% -2,609.20
IVV iShares Core S&P 500 ETF BlackRock 1,759.02 79,884.38 2.25% 6,692.57
SPY SPDR S&P 500 ETF Trust State Street Global Advisors 1,627.75 195,851.02 0.84% 1,269.88
VEA Vanguard FTSE Developed Markets ETF Vanguard 1,419.73 37,899.16 3.89% 8,552.20
VWO Vanguard FTSE Emerging Markets ETF Vanguard 1,222.49 44,471.69 2.83% 5,197.73
IEFA iShares Core MSCI EAFE ETF BlackRock 985.57 13,643.15 7.79% 4,143.18
IEMG iShares Core MSCI Emerging Markets ETF BlackRock 960.23 17,836.38 5.69% 6,471.11
AGG iShares Core U.S. Aggregate Bond ETF BlackRock 815.13 42,019.15 1.98% 10,589.06
XLF Financial Select Sector SPDR Fund State Street Global Advisors 756.57 13,129.34 6.11% -3,717.21
XLE Energy Select Sector SPDR Fund State Street Global Advisors 752.46 15,265.90 5.18% 1,909.43

 

Top Gainers (Year-to-Date)

Ticker Name Issuer Net Flows ($,mm) AUM ($M) % of AUM October 2016 Net Flows($,M)
GLD SPDR Gold Trust State Street Global Advisors 11,884.57 38,566.56 44.54% -215.88
AGG iShares Core U.S. Aggregate Bond ETF BlackRock 10,589.06 42,019.15 33.69% 815.13
VOO Vanguard S&P 500 Index Fund Vanguard 9,100.61 51,334.38 21.55% 708.04
VEA Vanguard FTSE Developed Markets ETF Vanguard 8,552.20 37,899.16 29.14% 1,419.73
EEM iShares MSCI Emerging Markets ETF BlackRock 6,720.12 31,264.77 27.38% 0.00
IVV iShares Core S&P 500 ETF BlackRock 6,692.57 79,884.38 9.14% 1,759.02
IEMG iShares Core MSCI Emerging Markets ETF BlackRock 6,471.11 17,836.38 56.94% 960.23
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF BlackRock 5,504.61 30,899.97 21.68% -1,682.58
USMV iShares Edge MSCI Min Vol USA ETF BlackRock 5,427.52 13,140.27 70.37% -889.73
VWO Vanguard FTSE Emerging Markets ETF Vanguard 5,197.73 44,471.69 13.23% 1,222.49

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