ETF Investors Piling Into Equity ETFs

Despite growing calls for a correction, equity funds—particularly U.S. stocks—are popular.

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Reviewed by: Cinthia Murphy
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Edited by: Cinthia Murphy

Despite growing calls for a correction, equity funds—particularly U.S. stocks—are popular.

 

Investors poured nearly $4 billion into U.S.-listed ETFs in the past week, the bulk of which landed in risk-assets; namely, U.S. and international equity funds. The flows, particularly into U.S equity ETFs, came despite what seems to be a growing call for a significant market correction.

Pundits like Marc Faber, for example, are reportedly talking of an asset bubble that’s not only about to burst, but about to unleash a full-out bear market in stocks. Yale Prof. Robert Shiller has been warning of highly overvalued U.S. stocks for months now.

Consider that since it bottomed out in March 2009, the S&P 500 has now rallied nearly 200 percent to near a new record level of 2,000 in recent days—a rally some argue is fueled more by easy money policies than actual fundamental strength.

Just this morning, the National Association of Business Economics reported that a survey of economists slashed U.S. GDP growth projections to 1.6 percent for 2014, from a previous 2.5 percent, according to the Associated Press. But the report also said that they are generally “optimistic” about the economy.

Plenty Buying Into Rally Nonetheless

For now, it seems there are plenty of investors who believe in this ongoing rally in stocks, pouring more than $1.66 billion in net new assets into U.S. equity ETFs alone in the past week, helping push total U.S.-listed ETF assets to $1.862 trillion.

Funds linked to broad-based large-cap U.S. equities indexes such as the S&P 500 and the Nasdaq 100 were particularly popular. The SPDR S&P 500 (SPY | A-98) attracted nearly $3 billion in net inflows, while the competing iShares Core S&P 500 (IVV | A-98) raked in $425 million in the past five days ended Thursday, July 10, according to our data.

The PowerShares QQQ (QQQ | A-42) gathered $1.13 billion in the week—a 2.5 percent AUM jump for the biggest Nasdaq-linked fund, which now boasts $45.2 billion in total assets.

Demand For Broad Emerging Market Exposure

Similarly popular were emerging-market-linked ETFs, which have been coming back into vogue in recent months. The two behemoths in the segment—the iShares MSCI Emerging Market ETF (EEM | B-100) and the Vanguard FTSE Emerging Market ETF (VWO | C-90)—were both found among the week’s 10 most popular ETFs, raking in a net of $395 million and $307 million, respectively.

US Small-Cap Stocks On Losing End

What investors were not particularly keen on was exposure to the U.S. small-cap segment, as represented by the Russell 2000.

Perhaps investor preference for U.S. large-cap over small-cap exposure betrays uncertainty about the true health of the U.S. economy. Small-caps are often thought of as more reflective of domestic themes. In the past 12 months, the Russell 2000 has lagged the S&P 500 by nearly 6 percentage points, as the chart below comparing a Russell 2000 ETF and an S&P 500 ETF shows.

IWM_IVV_1_Year_Perf

Chart courtesy of StockCharts.com

The iShares Russell 2000 ETF (IWM | A-81) bled nearly 5 percent of its total assets in the past five-day period as investors yanked more than $1.33 billion from the fund. IWM was, in fact, the least popular ETF in the past week.

Top 10 Creations (All ETFs)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
SPYSPDR S&P 5002,988.57172,876.481.76%
QQQPowerShares QQQ1,133.9545,271.152.57%
IVViShares Core S&P 500425.1457,077.970.75%
EEMiShares MSCI Emerging Markets395.6840,812.660.98%
VWOVanguard FTSE Emerging Markets307.2347,548.530.65%
DBCPowerShares DB Commodity Tracking230.445,873.064.08%
VOOVanguard S&P 500222.5119,655.621.15%
USCIUnited States Commodity196.29827.9531.08%
GLDSPDR Gold164.9534,466.130.48%
EWJiShares MSCI Japan159.6214,752.801.09%

Top 10 Redemptions (All ETFs)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
IWMiShares Russell 2000-1,330.5325,882.61-4.89%
IYJiShares U.S. Industrials-405.691,361.44-22.96%
FXGFirst Trust Consumer Staples AlphaDEX-368.481,409.49-20.72%
IYRiShares U.S. Real Estate-363.004,541.54-7.40%
XLIIndustrial Select SPDR-360.599,942.85-3.50%
FXHFirst Trust Health Care AlphaDEX-324.432,066.82-13.57%
XLVHealth Care Select SPDR-247.819,818.11-2.46%
FXRFirst Trust Industrials/Producer Durables AlphaDEX-231.27947.21-19.62%
USTProShares Ultra 7-10 Year Treasury-203.7126.92-88.33%
SSOProShares Ultra S&P 500-195.131,790.39-9.83%

ETF Weekly Flows By Asset Class

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity1,664.361,014,545.660.16%
International Equity1,620.35449,032.110.36%
U.S. Fixed Income-54.15253,014.07-0.02%
International Fixed Income117.8824,867.100.47%
Commodities640.3468,947.250.93%
Currency-15.361,700.89-0.90%
Leveraged-37.0121,860.13-0.17%
Inverse-4.9320,637.03-0.02%
Asset Allocation46.454,913.570.95%
Alternatives-31.043,002.37-1.03%
Total:3,946.891,862,520.180.21%

Top 10 Volume Surprises, Funds >$50 mm AUM

TickerNameAverage Volume
(30 Day)
1 Week Average
Volume
% of Average
VNQIVanguard Global ex-U.S. Real Estate478,00311,226,466469.72%
IWXiShares Russell Top 200 Value27,049628,607464.79%
EWKiShares MSCI Belgium Capped125,8702,393,047380.24%
PWBPowerShares Dynamic Large Cap Growth42,381785,234370.56%
NFOGuggenheim Insider Sentiment24,475439,500359.14%
IFSMiShares Developed Small-Cap ex North America8,195136,052332.04%
RYJGuggenheim Raymond James SB-1 Equity51,268842,719328.75%
HYSPIMCO 0-5 Year High Yield Corporate Bond520,2958,290,031318.67%
LDURPIMCO Low Duration5268,308315.88%
TUZPIMCO 1-3 Year U.S. Treasury22,014289,470262.99%

Top 10 Weekly Performers, Excluding Leverage/Inverse Funds and <1,000 Shares Traded

TickerNameWeekly PerformanceWeekly VolumeAUM ($, mm)
QDEMMarket Vectors MSCI Emerging Markets Quality Dividend10.38%1,0735.42
EEHELEMENTS Linked to SPECTRUM Large Cap U.S. Momentum ETN9.19%1,0970.94
IDXJMarket Vectors Indonesia Small Cap7.75%274,7387.16
EIDOiShares MSCI Indonesia7.44%5,025,504530.33
IDXMarket Vectors Indonesia6.69%1,061,592234.85
QATiShares MSCI Qatar Capped5.62%34,13633.68
UBMETRACS CMCI Industrial Metals Total Return ETN5.29%2,4004.84
GDXJMarket Vectors Junior Gold Miners5.08%36,651,4702,490.27
HEVYiPath Pure Beta Industrial Metals ETN4.74%1,1930.69
GLDXGlobal X Gold Explorers4.63%278,84753.81

Bottom 10 Weekly Performers, Excluding Leverage/Inverse Funds and <1,000 Shares Traded

TickerNameWeekly PerformanceWeekly VolumeAUM ($, mm)
PGALGlobal X FTSE Portugal 20-9.76%420,63322.48
FUEELEMENTS MLCX Biofuels Total Return ETN-9.69%21,8490.96
GRNiPath Global Carbon ETN-9.23%5,0821.76
SCIFMarket Vectors India Small-Cap-9.04%1,222,542402.24
SCINEGShares India Small Cap-8.72%338,38032.02
CTNNiPath Pure Beta Cotton ETN-7.25%10,3982.04
XBISPDR S&P Biotech-7.07%2,479,2331,114.38
GREKGlobal X FTSE Greece 20-6.83%1,757,375243.80
INXXEGShares India Infrastructure-6.73%476,45663.81
GAZiPath Dow Jones-UBS Natural Gas Total Return ETN-6.62%213,36726.36

Top 10 YTD Performers

TickerNameYTD PerformanceWeekly PerformanceAUM ($, mm)
JNUGDirexion Daily Junior Gold Miners Bull 3X93.2115.52202.98
NUGTDirexion Daily Gold Miners Bull 3X71.401.38813.91
SOXLDirexion Daily Semiconductor Bull 3X69.55-1.36116.99
DRNDirexion Daily Real Estate Bull 3x62.431.7095.50
INDLDirexion Daily India Bull 3X60.60-11.9764.57
DDPPowerShares DB Commodity Short ETN52.522.152.23
GLDXGlobal X Gold Explorers52.184.6353.81
SCIFMarket Vectors India Small-Cap51.04-9.04402.24
SILJPureFunds ISE Junior Silver (Small Cap Miners/Explorers)49.052.439.00
AGAPowerShares DB Agriculture Double Short ETN47.709.712.10

Bottom 10 YTD Performers

TickerNameYTD PerformanceWeekly PerformanceAUM ($, mm)
JDSTDirexion Daily Junior Gold Miners Bear 3X-83.69-17.3072.80
DUSTDirexion Daily Gold Miners Bear 3X-63.68-3.56248.86
CVOLC-Tracks Citi Volatility ETN-61.183.135.28
TVIXVelocityShares Daily 2X VIX Short Term ETN-60.407.22161.41
UVXYProShares Ultra VIX Short-Term Futures-60.297.68284.76
DGAZVelocityShares 3X Inverse Natural Gas ETN-56.5617.43339.15
SOXSDirexion Daily Semiconductor Bear 3X-48.560.8421.25
GASXDirexion Daily Natural Gas Related Bear 3X Shares-44.359.548.64
DRVDirexion Daily Real Estate Bear 3x-42.79-1.2111.33
TVIZVelocityShares Daily 2X VIX Mid Term ETN-39.910.151.04

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.

Cinthia Murphy is head of digital experience, advocating for the user in all that etf.com does. She previously served as managing editor and writer for etf.com, specializing in ETF content and multimedia. Cinthia’s experience includes time at Dow Jones and former BridgeNews, covering commodity futures markets in Chicago and Brazil equities in Sao Paulo. She has a bachelor’s degree in journalism from the University of Missouri-Columbia.