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.
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 $258.5 billion.
Stocks Bolstered By Dovish Fed
Perhaps the biggest news on the week came on Wednesday, when Fed Chairman Jerome Powell said that interest rates were “just below” neutral—the level which neither restricts nor stimulates economic growth.
The comments were a sharp reversal from what the Fed chair said in early October, when he remarked that rates were “a long way” from neutral, setting off a big sell-off on Wall Street. The latest comments had the opposite effect: The S&P 500 soared 2.3% on Wednesday alone.
Bolstered by a more dovish Fed, investors happily added to their positions in U.S. equities. The SPDR S&P 500 ETF Trust (SPY), the iShares Edge MSCI Min Vol U.S.A. ETF (USMV) and the iShares Russell 2000 ETF (IWM) were among the biggest flows winners of the week.
At the same time, the iShares Core MSCI Emerging Markets ETF (IEMG) saw the largest inflows among international equity ETFs. Hopes that the U.S. and China might reach a trade deal this weekend at the G-20 summit on Argentina have, at least temporarily, brightened the prospects for emerging markets.
Corporate Bonds Shunned
On the flip side, investors continued to shun riskier bonds this week. Though short-term Treasury ETFs, like the iShares 1-3 Year Treasury Bond ETF (SHY) and the iShares Short Treasury Bond ETF (SHV) registered hefty inflows, corporate bond ETFs such as the iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD), the iShares iBoxx USD High Yield Corporate Bond ETF (HYG) and the Invesco Senior Loan ETF (BKLN) were hit with outflows.
Prices for BKLN dipped to a 2 ½-year low on Thursday.
For a full list of this week’s top inflows and outflows, see the tables below:
Top 10 Creations (All ETFs)
| Ticker | Name | Net Flows ($,mm) | AUM ($, mm) | AUM % Change |
| SPY | SPDR S&P 500 ETF Trust | 2,443.35 | 265,046.44 | 0.92% |
| IEMG | iShares Core MSCI Emerging Markets ETF | 1,350.19 | 49,770.10 | 2.71% |
| SHY | iShares 1-3 Year Treasury Bond ETF | 956.06 | 17,095.71 | 5.59% |
| USMV | iShares Edge MSCI Min Vol U.S.A. ETF | 767.92 | 19,192.26 | 4.00% |
| SHV | iShares Short Treasury Bond ETF | 684.44 | 17,303.33 | 3.96% |
| IWM | iShares Russell 2000 ETF | 678.02 | 45,719.77 | 1.48% |
| TLT | iShares 20+ Year Treasury Bond ETF | 539.48 | 7,526.35 | 7.17% |
| VXF | Vanguard Extended Market ETF | 536.73 | 6,842.83 | 7.84% |
| XLP | Consumer Staples Select Sector SPDR Fund | 520.66 | 10,190.41 | 5.11% |
| IWD | iShares Russell 1000 Value ETF | 511.41 | 38,881.50 | 1.32% |
Top 10 Redemptions (All ETFs)
| Ticker | Name | Net Flows ($,mm) | AUM ($, mm) | AUM % Change |
| LQD | iShares iBoxx USD Investment Grade Corporate Bond ETF | -593.15 | 29,873.49 | -1.99% |
| HYG | iShares iBoxx USD High Yield Corporate Bond ETF | -331.93 | 14,037.15 | -2.36% |
| AGG | iShares Core U.S. Aggregate Bond ETF | -293.39 | 53,533.79 | -0.55% |
| BKLN | Invesco Senior Loan ETF | -282.36 | 6,112.61 | -4.62% |
| DIA | SPDR Dow Jones Industrial Average ETF Trust | -268.05 | 21,996.72 | -1.22% |
| IYR | iShares U.S. Real Estate ETF | -203.68 | 3,502.32 | -5.82% |
| SHYG | iShares 0-5 Year High Yield Corporate Bond ETF | -178.30 | 2,843.51 | -6.27% |
| KRE | SPDR S&P Regional Banking ETF | -172.70 | 3,991.09 | -4.33% |
| UNG | United States Natural Gas Fund LP | -171.83 | 387.21 | -44.38% |
| EWQ | iShares MSCI France ETF | -150.84 | 594.56 | -25.37% |
ETF Weekly Flows By Asset Class
| Net Flows ($, mm) | AUM ($, mm) | % of AUM | |
| U.S. Equity | 10,282.96 | 2,065,814.30 | 0.50% |
| International Equity | 4,288.40 | 758,550.06 | 0.57% |
| U.S. Fixed Income | 2,726.36 | 571,183.67 | 0.48% |
| International Fixed Income | 379.99 | 66,322.83 | 0.57% |
| Commodities | -248.12 | 59,381.53 | -0.42% |
| Currency | 16.02 | 1,131.15 | 1.42% |
| Leveraged | 221.74 | 35,185.83 | 0.63% |
| Inverse | -28.67 | 12,765.02 | -0.22% |
| Asset Allocation | 43.00 | 9,037.74 | 0.48% |
| Alternatives | 263.40 | 4,859.87 | 5.42% |
| Total: | 17,945.08 | 3,584,232.00 | 0.50% |
Asset Classes (Year-to-Date)
| Net Flows ($, mm) | AUM ($, mm) | % of AUM | |
| U.S. Equity | 116,178.91 | 2,065,814.30 | 5.62% |
| International Equity | 52,202.02 | 758,550.06 | 6.88% |
| U.S. Fixed Income | 68,511.43 | 571,183.67 | 11.99% |
| International Fixed Income | 11,553.59 | 66,322.83 | 17.42% |
| Commodities | -527.00 | 59,381.53 | -0.89% |
| Currency | -33.84 | 1,131.15 | -2.99% |
| Leveraged | 7,293.22 | 35,185.83 | 20.73% |
| Inverse | 1,996.28 | 12,765.02 | 15.64% |
| Asset Allocation | 806.58 | 9,037.74 | 8.92% |
| Alternatives | 494.14 | 4,859.87 | 10.17% |
| Total: | 258,475.33 | 3,584,232.00 | 7.21% |
Top 10 Volume Surprises, Funds >$50 mm AUM
| Ticker | Name | Average Volume (30 Day) | 1 Week Average Volume | % of Average |
| TDTF | FlexShares iBoxx 5 Year Target Duration TIPS Index Fund | 191,790 | 809,773 | 422.22% |
| BCI | Aberdeen Standard Bloomberg All Commodity Strategy K-1 Free ETF | 73,687 | 285,784 | 387.83% |
| CVY | Invesco Zacks Multi-Asset Income ETF | 45,211 | 151,651 | 335.43% |
| ESGV | Vanguard ESG U.S. Stock ETF | 46,579 | 154,732 | 332.19% |
| KNOW | Direxion All Cap Insider Sentiment Shares | 45,403 | 139,469 | 307.18% |
| CMBS | iShares CMBS ETF | 27,189 | 82,870 | 304.79% |
| VRP | Invesco Variable Rate Preferred ETF | 641,664 | 1,600,033 | 249.36% |
| DEUS | Xtrackers Russell 1000 Comprehensive Factor ETF | 46,346 | 113,978 | 245.93% |
| RBIN | Nationwide Risk-Based International Equity ETF | 514 | 1,200 | 233.57% |
| RBUS | Nationwide Risk-Based U.S. Equity ETF | 217 | 381 | 175.82% |
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.
