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.
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 $580 million.
After a sizzling rally in corporate bonds for much of the year, investors may now be cashing in amid renewed declines in oil prices and anticipation of a December rate hike.
For a full list of this week's top inflows and outflows, see the tables below:
Top 10 Creations (All ETFs)
Ticker | Name | Net Flows ($,mm) | AUM ($, mm) | AUM % Change |
TIP | iShares TIPS Bond ETF | 972.76 | 20,534.82 | 4.97% |
IVV | iShares Core S&P 500 ETF | 573.48 | 79,289.65 | 0.73% |
QQQ | PowerShares QQQ Trust | 558.68 | 40,131.35 | 1.41% |
SHY | iShares 1-3 Year Treasury Bond ETF | 517.89 | 11,191.51 | 4.85% |
UWTI | VelocityShares 3x Long Crude Oil ETN | 461.20 | 1,253.65 | 58.20% |
TLT | iShares 20+ Year Treasury Bond ETF | 353.35 | 6,665.65 | 5.60% |
GLD | SPDR Gold Trust | 308.08 | 39,806.94 | 0.78% |
USO | United States Oil Fund LP | 269.90 | 3,048.78 | 9.71% |
IEF | iShares 7-10 Year Treasury Bond ETF | 208.94 | 8,552.75 | 2.50% |
VCSH | Vanguard Short-Term Corporate Bond Index Fund | 208.49 | 15,272.63 | 1.38% |
Top 10 Redemptions (All ETFs)
Ticker | Name | Net Flows ($,mm) | AUM ($, mm) | AUM % Change |
SPY | SPDR S&P 500 ETF Trust | -2,481.30 | 189,574.60 | -1.29% |
HYG | iShares iBoxx $ High Yield Corporate Bond ETF | -2,458.24 | 15,252.51 | -13.88% |
LQD | iShares iBoxx $ Investment Grade Corporate Bond ETF | -1,715.73 | 30,438.73 | -5.34% |
JNK | SPDR Barclays High Yield Bond ETF | -580.07 | 11,021.70 | -5.00% |
DIA | SPDR Dow Jones Industrial Average ETF Trust | -316.42 | 11,369.12 | -2.71% |
XLY | Consumer Discretionary Select Sector SPDR Fund | -295.33 | 8,853.83 | -3.23% |
XLI | Industrial Select Sector SPDR Fund | -295.06 | 7,106.57 | -3.99% |
VXX | iPath S&P 500 VIX Short-Term Futures ETN | -290.46 | 1,791.48 | -13.95% |
EMB | iShares JP Morgan USD Emerging Markets Bond ETF | -274.87 | 9,441.01 | -2.83% |
IWM | iShares Russell 2000 ETF | -253.40 | 26,233.11 | -0.96% |
ETF Weekly Flows By Asset Class
Net Flows ($, mm) | AUM ($, mm) | % of AUM | |
U.S. Equity | -2,003.20 | 1,297,626.71 | -0.15% |
International Equity | 504.69 | 505,286.77 | 0.10% |
U.S. Fixed Income | -2,307.57 | 409,828.62 | -0.56% |
International Fixed Income | -215.95 | 41,681.96 | -0.52% |
Commodities | 702.87 | 71,976.64 | 0.98% |
Currency | -68.86 | 3,247.49 | -2.12% |
Leveraged | 703.93 | 23,749.11 | 2.96% |
Inverse | -328.94 | 20,371.78 | -1.61% |
Asset Allocation | 5.94 | 6,378.12 | 0.09% |
Alternatives | -303.27 | 4,533.50 | -6.69% |
Total: | -3,310.35 | 2,384,680.71 | -0.14% |
Top 10 Volume Surprises, Funds >$50 mm AUM
Ticker | Name | Average Volume (30 Day) | 1 Week Average Volume | % of Average |
JPXN | iShares JPX-Nikkei 400 ETF | 9,135 | 41,581 | 455.20% |
EUSA | iShares MSCI USA Equal Weighted ETF | 8,786 | 37,919 | 431.58% |
XAR | SPDR S&P Aerospace & Defense ETF | 36,406 | 155,283 | 426.53% |
JPGE | J.P. Morgan Diversified Return Global Equity ETF | 8,060 | 28,375 | 352.02% |
PHDG | Powershares S&P 500 Downside Hedged Portfolio | 18,795 | 66,880 | 355.85% |
DFJ | WisdomTree Japan SmallCap Dividend Fund | 43,845 | 146,017 | 333.03% |
BSCM | Guggenheim BulletShares 2022 Corporate Bond ETF | 95,889 | 242,277 | 252.66% |
QDYN | FlexShares Quality Dividend Dynamic Index Fund | 5,915 | 13,856 | 234.24% |
WPS | iShares International Developed Property ETF | 18,231 | 40,948 | 224.61% |
IEUS | iShares MSCI Europe Small-Cap ETF | 15,050 | 51,484 | 342.10% |
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.