Big Shifts In ETF Ownership

[Editor’s Note: The following originally appeared on Logicly. Emil Tarazi is co-founder and CEO of ETFLogic.]

We love diving deep into 13F holdings to better understand the shifting landscape of ETF ownership amongst the biggest institutional owners.

Generally, institutions have 45 days after the end of the quarter to report their holdings. May 15, 2021 marked that day for the first quarter of 2021. In the following, we analyse the biggest shifts in ETF ownership as reported between the last two quarters.

Q1 2021 highlighted continued impressive growth in the ETF space as ETF share ownership grew by over 6% in a single quarter. ESG ownership increased by more than 50% of that baseline with a more than 12% increase in ESG shares held.

Gold positioning decreased, highlighting the general “risk on” bull-mentality that pervaded into the new year and through most of Q1 and early Q2.

Reading The Tea Leaves

Obviously, 13F data should always be taken with a grain of salt. Institutions tend to pare assets into quarter end and especially year end to keep their balance sheets looking slim. Also, the standard 45-day lag means that institutions have sufficient time to reposition their portfolios since last reporting publicly.

Here are some more interesting stats in institutional ETF ownership for Q1 2021. Any growth numbers are based on the Q4 2020 lookback:

• 6.7% increase in number of shares owned
• 43 billion shares, or $3.6 trillion, in ETF assets measured
• 3,800+ institutions reporting (at the time of writing, some last-minute 13F filings were not included)
• 12.3% increase in ESG shares held to reach $34bn in assets
• 6.2% decline in gold commodity ETFs held bringing total assets to $27bn. SPDR Gold Trust (GLD) dropped 17% of shares held, and iShares Gold Trust (IAU) lost 7% of shares held, quarter over quarter
• 7.1% increase in equity dividend funds, bringing assets to $83bn. iShares Core Dividend Growth ETF (DGRO), Schwab U.S. Dividend Equity ETF (SCHD), and iShares Select Dividend ETF (DVY) saw the strongest positive growth in shares held.

13F data can vary significantly across dates and institutions due to different reporting standards as well as the timing of corporate actions. Every effort was made to normalize these differences. If you notice any errors in the data, please reach out to the team on engineering at etflogic.io.

Largest Institutional Positions & Ownership Change

SPDR S&P 500 ETF Trust (SPY) reigns supreme as the major S&P 500 positioning tool. However, Vanguard S&P 500 ETF (VOO) wins in terms of growth in shares held, followed by iShares Core S&P 500 ETF (IVV). VOO and IVV have lower expense ratios than their older sibling, SPY.

iShares Core MSCI Emerging Markets ETF (IEMG) +10% and Vanguard FTSE Emerging Markets ETF (VWO) +4.9% growth win out over the developed market iShares Core MSCI EAFE ETF (IEFA), -1.6% and iShares MSCI EAFE ETF (EFA) -0.7%.

Largest Equity ETF Ownership Change In Equity-Focused ETFs With Over $1Bn In Notional Held

Here we look at equity-focused ETFs with more than $1bn in notional holdings. A large ETF model portfolio shift into iShares U.S. Energy ETF (IYE) was seen in Q1 2021, driving much of the assets into this US energy sector-focused name.

VanEck Vectors Semiconductor ETF (SMH) and SPDR S&P Retail ETF (XRT) saw big swings in opposite directions, highlighting the increased need for semiconductors and the decrease in fortunes of retail shopping.

An increase in positioning of SPDR S&P Homebuilders ETF (XHB) by end of Q1 is also quite impressive, as that bet has paid off handsomely with recent price action.

Largest Ownership Change In Fixed Income ETFs

Here we look at fixed income ETFs with more than $1bn in notional holdings. The continued inverted yield curve and its ever-steepening slope have investors focused on expectations of increased inflation. We see big share ownership growth in Treasury inflation-protected securities (TIPS) names like iShares 0-5 Year TIPS Bond ETF (STIP), Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) and Schwab U.S. TIPS ETF (SCHP).

High yield was a bit unloved, as we saw iShares 0-5 Year High Yield Corporate Bond ETF (SHYG) and iShares iBoxx USD High Yield Corporate Bond ETF (HYG) positions pared down. Positioning on the medium-to-longer end of the Treasury curve was strong, with names like SPDR Portfolio Long Term Treasury ETF (SPTL), iShares 20+ Year Treasury Bond ETF (TLT), SPDR Portfolio Intermediate Term Treasury ETF (ITE), iShares 7-10 Year Treasury Bond ETF (IEF) increasing.

Largest New ETF Entrants On Holders Filings

New entrants are defined as ETFs that did not show up in Q4 2020 filings but made it to Q1 2021. Many names appear to be thematic in nature. Main Thematic Innovation ETF (TMAT) is similar to the innovation-focused ARK Innovation ETF (ARKK) fund. AdvisorShares Alpha DNA Equity Sentiment ETF (SENT) is focused on sentiment analysis through leveraging alternative data sets, perhaps like scraping Reddit.

Many new entrants are in the growing field of options-embedded strategies that offer structured-product like returns. Fairly recent players here are AllianzIM and Cboe Vest. By definition, these ETFs will expire as they come to term, and new ETFs will take their place further out in the calendar.

Emil Tarazi is co-founder and CEO at ETFLogic, creators of the Logicly platform, which empowers advisors globally with deep-dive analytics, backtesting and holdings analysis on portfolios. Emil can be reached at emil at etflogic.io.