ETF Investors Go Bargain Hunting In Oil, Dump Corporate Bonds

Investors cashed out of ETFs on the whole this week, but certain ETFs garnered hefty inflows.

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

ETF investors cashed out of many of their positions this week ahead of the U.S. presidential election next Tuesday. In total, $3.3 billion came out of U.S.-listed ETFs in the week ending Thursday, Nov. 3, according to FactSet. 

The biggest losers were U.S. fixed-income ETFs, which had outflows of $2.3 billion. Though the Fed left interest rates unchanged at its meeting on Wednesday, traders continue to anticipate that the central bank will hike rates at the December meeting.

Meanwhile, U.S. equity ETFs also saw outflows—to the tune of $2 billion in total. The S&P 500 fell to a four-month low during the week and fell for nine-straight sessions through Thursday, its longest losing streak since 1980.

However, some ETF groups did see inflows. International equity ETFs had inflows of $500 million, and commodity ETFs had inflows of $700 million.

Treasurys, Oil & Gold In Favor
Despite the negative week, there were a number of ETFs to see strong inflows. The iShares TIPS Bond ETF (TIP) led the pack, with creations of more than $970 million. The iShares 1-3 Year Treasury Bond ETF (SHY) and the iShares 20+ Year Treasury Bond ETF (TLT) were other Treasury-related winners, with inflows of $518 million and $353 million, respectively.

At the same time, a pair of oil ETFs were also strongly in favor this week, as traders went bargain hunting. Oil prices hit six-week lows below $44/barrel on Friday after Saudi Arabia threatened to raise its production to punish Iran for not agreeing to freeze its output.

The VelocityShares 3x Long Crude Oil ETN (UWTI) had inflows of $461 million, representing a whopping 58% increase in its assets under management. The United States Oil Fund (USO) had inflows of $270 million.

Another commodity ETF to find itself on the top inflows list was the SPDR Gold Trust (GLD), with inflows of $309 million. Election uncertainty helped push prices for gold back above the $1,300/oz level this week.

Corporate Bonds See Hefty Outflows
On the other side of the spectrum, three corporate bond ETFs dominated the outflows list. The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) saw outflows of $2.5 billion, reducing its AUM by nearly 14%. 

The iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) had outflows of $1.7 billion, and the SPDR Barclays High Yield Bond ETF (JNK) had outflows of $580 million.

After a sizzling rally in corporate bonds for much of the year, investors may now be cashing in amid renewed declines in oil prices and anticipation of a December rate hike. 

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
TIPiShares TIPS Bond ETF972.7620,534.824.97%
IVViShares Core S&P 500 ETF573.4879,289.650.73%
QQQPowerShares QQQ Trust558.6840,131.351.41%
SHYiShares 1-3 Year Treasury Bond ETF517.8911,191.514.85%
UWTIVelocityShares 3x Long Crude Oil ETN461.201,253.6558.20%
TLTiShares 20+ Year Treasury Bond ETF353.356,665.655.60%
GLDSPDR Gold Trust308.0839,806.940.78%
USOUnited States Oil Fund LP269.903,048.789.71%
IEFiShares 7-10 Year Treasury Bond ETF208.948,552.752.50%
VCSHVanguard Short-Term Corporate Bond Index Fund208.4915,272.631.38%

Top 10 Redemptions (All ETFs)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
SPYSPDR S&P 500 ETF Trust-2,481.30189,574.60-1.29%
HYGiShares iBoxx $ High Yield Corporate Bond ETF-2,458.2415,252.51-13.88%
LQDiShares iBoxx $ Investment Grade Corporate Bond ETF-1,715.7330,438.73-5.34%
JNKSPDR Barclays High Yield Bond ETF-580.0711,021.70-5.00%
DIASPDR Dow Jones Industrial Average ETF Trust-316.4211,369.12-2.71%
XLYConsumer Discretionary Select Sector SPDR Fund-295.338,853.83-3.23%
XLIIndustrial Select Sector SPDR Fund-295.067,106.57-3.99%
VXXiPath S&P 500 VIX Short-Term Futures ETN-290.461,791.48-13.95%
EMBiShares JP Morgan USD Emerging Markets Bond ETF-274.879,441.01-2.83%
IWMiShares Russell 2000 ETF-253.4026,233.11-0.96%

ETF Weekly Flows By Asset Class

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity-2,003.201,297,626.71-0.15%
International Equity504.69505,286.770.10%
U.S. Fixed Income-2,307.57409,828.62-0.56%
International Fixed Income-215.9541,681.96-0.52%
Commodities702.8771,976.640.98%
Currency-68.863,247.49-2.12%
Leveraged703.9323,749.112.96%
Inverse-328.9420,371.78-1.61%
Asset Allocation5.946,378.120.09%
Alternatives-303.274,533.50-6.69%
Total:-3,310.352,384,680.71-0.14%

Top 10 Volume Surprises, Funds >$50 mm AUM

TickerNameAverage Volume
(30 Day)
1 Week Average
Volume
% of Average
JPXNiShares JPX-Nikkei 400 ETF9,13541,581455.20%
EUSAiShares MSCI USA Equal Weighted ETF8,78637,919431.58%
XARSPDR S&P Aerospace & Defense ETF36,406155,283426.53%
JPGEJ.P. Morgan Diversified Return Global Equity ETF8,06028,375352.02%
PHDGPowershares S&P 500 Downside Hedged Portfolio18,79566,880355.85%
DFJWisdomTree Japan SmallCap Dividend Fund43,845146,017333.03%
BSCMGuggenheim BulletShares 2022 Corporate Bond ETF95,889242,277252.66%
QDYNFlexShares Quality Dividend Dynamic Index Fund5,91513,856234.24%
WPSiShares International Developed Property ETF18,23140,948224.61%
IEUSiShares MSCI Europe Small-Cap ETF15,05051,484342.10%

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.