Dovish Fed Spurs $18B Into ETFs

Encouraged by dovish comments from Fed chair, investors plowed money into U.S and international equity ETFs this week.

sumit
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Senior ETF Analyst
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Reviewed by: Sumit Roy
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Edited by: Sumit Roy

Encouraging news from the Fed and Washington kindled animal spirits this week as investors added nearly $18 billion of new money into U.S.-listed ETFs. A cool $10.3 billion flowed into U.S. equity ETFs; $4.3 billion went into international equity ETFs; and $2.8 billion entered U.S. fixed-income ETFs, during the week ending Thursday, Nov. 29.

The data, which come from FactSet, also showed year-to-date inflows for ETFs climbed to $258.5 billion.

Stocks Bolstered By Dovish Fed

Perhaps the biggest news on the week came on Wednesday, when Fed Chairman Jerome Powell said that interest rates were “just below” neutral—the level which neither restricts nor stimulates economic growth.

The comments were a sharp reversal from what the Fed chair said in early October, when he remarked that rates were “a long way” from neutral, setting off a big sell-off on Wall Street. The latest comments had the opposite effect: The S&P 500 soared 2.3% on Wednesday alone.

Bolstered by a more dovish Fed, investors happily added to their positions in U.S. equities. The SPDR S&P 500 ETF Trust (SPY), the iShares Edge MSCI Min Vol U.S.A. ETF (USMV) and the iShares Russell 2000 ETF (IWM) were among the biggest flows winners of the week.

At the same time, the iShares Core MSCI Emerging Markets ETF (IEMG) saw the largest inflows among international equity ETFs. Hopes that the U.S. and China might reach a trade deal this weekend at the G-20 summit on Argentina have, at least temporarily, brightened the prospects for emerging markets.

Corporate Bonds Shunned

On the flip side, investors continued to shun riskier bonds this week. Though short-term Treasury ETFs, like the iShares 1-3 Year Treasury Bond ETF (SHY) and the iShares Short Treasury Bond ETF (SHV) registered hefty inflows, corporate bond ETFs such as the iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD), the iShares iBoxx USD High Yield Corporate Bond ETF (HYG) and the Invesco Senior Loan ETF (BKLN) were hit with outflows.

Prices for BKLN dipped to a 2 ½-year low on Thursday.

For a full list of this week’s top inflows and outflows, see the tables below:

Top 10 Creations (All ETFs)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
SPYSPDR S&P 500 ETF Trust2,443.35265,046.440.92%
IEMGiShares Core MSCI Emerging Markets ETF1,350.1949,770.102.71%
SHYiShares 1-3 Year Treasury Bond ETF956.0617,095.715.59%
USMViShares Edge MSCI Min Vol U.S.A. ETF767.9219,192.264.00%
SHViShares Short Treasury Bond ETF684.4417,303.333.96%
IWMiShares Russell 2000 ETF678.0245,719.771.48%
TLTiShares 20+ Year Treasury Bond ETF539.487,526.357.17%
VXFVanguard Extended Market ETF536.736,842.837.84%
XLPConsumer Staples Select Sector SPDR Fund520.6610,190.415.11%
IWDiShares Russell 1000 Value ETF511.4138,881.501.32%

Top 10 Redemptions (All ETFs)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
LQDiShares iBoxx USD Investment Grade Corporate Bond ETF-593.1529,873.49-1.99%
HYGiShares iBoxx USD High Yield Corporate Bond ETF-331.9314,037.15-2.36%
AGGiShares Core U.S. Aggregate Bond ETF-293.3953,533.79-0.55%
BKLNInvesco Senior Loan ETF-282.366,112.61-4.62%
DIASPDR Dow Jones Industrial Average ETF Trust-268.0521,996.72-1.22%
IYRiShares U.S. Real Estate ETF-203.683,502.32-5.82%
SHYGiShares 0-5 Year High Yield Corporate Bond ETF-178.302,843.51-6.27%
KRESPDR S&P Regional Banking ETF-172.703,991.09-4.33%
UNGUnited States Natural Gas Fund LP-171.83387.21-44.38%
EWQiShares MSCI France ETF-150.84594.56-25.37%

ETF Weekly Flows By Asset Class

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity10,282.962,065,814.300.50%
International Equity4,288.40758,550.060.57%
U.S. Fixed Income2,726.36571,183.670.48%
International Fixed Income379.9966,322.830.57%
Commodities -248.1259,381.53-0.42%
Currency16.021,131.151.42%
Leveraged221.7435,185.830.63%
Inverse-28.6712,765.02-0.22%
Asset Allocation43.009,037.740.48%
Alternatives263.404,859.875.42%
Total:17,945.083,584,232.000.50%

Asset Classes (Year-to-Date)

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity116,178.912,065,814.305.62%
International Equity52,202.02758,550.066.88%
U.S. Fixed Income68,511.43571,183.6711.99%
International Fixed Income11,553.5966,322.8317.42%
Commodities -527.0059,381.53-0.89%
Currency-33.841,131.15-2.99%
Leveraged7,293.2235,185.8320.73%
Inverse1,996.2812,765.0215.64%
Asset Allocation806.589,037.748.92%
Alternatives494.144,859.8710.17%
Total:258,475.333,584,232.007.21%

Top 10 Volume Surprises, Funds >$50 mm AUM

TickerNameAverage Volume
(30 Day)
1 Week Average
Volume
% of Average
TDTFFlexShares iBoxx 5 Year Target Duration TIPS Index Fund191,790809,773422.22%
BCIAberdeen Standard Bloomberg All Commodity Strategy K-1 Free ETF73,687285,784387.83%
CVYInvesco Zacks Multi-Asset Income ETF45,211151,651335.43%
ESGVVanguard ESG U.S. Stock ETF46,579154,732332.19%
KNOWDirexion All Cap Insider Sentiment Shares45,403139,469307.18%
CMBSiShares CMBS ETF27,18982,870304.79%
VRPInvesco Variable Rate Preferred ETF641,6641,600,033249.36%
DEUSXtrackers Russell 1000 Comprehensive Factor ETF46,346113,978245.93%
RBINNationwide Risk-Based International Equity ETF5141,200233.57%
RBUSNationwide Risk-Based U.S. Equity ETF217381175.82%

 

Disclaimer: All data as of 6 a.m. Eastern time the date the article is published. Data is believed to be accurate; however, transient market data is often subject to subsequent revision and correction by the exchanges.

 

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.