ETF Investors Piling Into Equity ETFs
Despite growing calls for a correction, equity funds—particularly U.S. stocks—are popular.
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.
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 $1.33 billion from the fund. IWM was, in fact, the least popular ETF in the past week.
Top 10 Creations (All ETFs)
Ticker | Name | Net Flows ($,mm) | AUM ($, mm) | AUM % Change |
SPY | SPDR S&P 500 | 2,988.57 | 172,876.48 | 1.76% |
QQQ | PowerShares QQQ | 1,133.95 | 45,271.15 | 2.57% |
IVV | iShares Core S&P 500 | 425.14 | 57,077.97 | 0.75% |
EEM | iShares MSCI Emerging Markets | 395.68 | 40,812.66 | 0.98% |
VWO | Vanguard FTSE Emerging Markets | 307.23 | 47,548.53 | 0.65% |
DBC | PowerShares DB Commodity Tracking | 230.44 | 5,873.06 | 4.08% |
VOO | Vanguard S&P 500 | 222.51 | 19,655.62 | 1.15% |
USCI | United States Commodity | 196.29 | 827.95 | 31.08% |
GLD | SPDR Gold | 164.95 | 34,466.13 | 0.48% |
EWJ | iShares MSCI Japan | 159.62 | 14,752.80 | 1.09% |
Top 10 Redemptions (All ETFs)
Ticker | Name | Net Flows ($,mm) | AUM ($, mm) | AUM % Change |
IWM | iShares Russell 2000 | -1,330.53 | 25,882.61 | -4.89% |
IYJ | iShares U.S. Industrials | -405.69 | 1,361.44 | -22.96% |
FXG | First Trust Consumer Staples AlphaDEX | -368.48 | 1,409.49 | -20.72% |
IYR | iShares U.S. Real Estate | -363.00 | 4,541.54 | -7.40% |
XLI | Industrial Select SPDR | -360.59 | 9,942.85 | -3.50% |
FXH | First Trust Health Care AlphaDEX | -324.43 | 2,066.82 | -13.57% |
XLV | Health Care Select SPDR | -247.81 | 9,818.11 | -2.46% |
FXR | First Trust Industrials/Producer Durables AlphaDEX | -231.27 | 947.21 | -19.62% |
UST | ProShares Ultra 7-10 Year Treasury | -203.71 | 26.92 | -88.33% |
SSO | ProShares Ultra S&P 500 | -195.13 | 1,790.39 | -9.83% |
ETF Weekly Flows By Asset Class
Net Flows ($, mm) | AUM ($, mm) | % of AUM | |
U.S. Equity | 1,664.36 | 1,014,545.66 | 0.16% |
International Equity | 1,620.35 | 449,032.11 | 0.36% |
U.S. Fixed Income | -54.15 | 253,014.07 | -0.02% |
International Fixed Income | 117.88 | 24,867.10 | 0.47% |
Commodities | 640.34 | 68,947.25 | 0.93% |
Currency | -15.36 | 1,700.89 | -0.90% |
Leveraged | -37.01 | 21,860.13 | -0.17% |
Inverse | -4.93 | 20,637.03 | -0.02% |
Asset Allocation | 46.45 | 4,913.57 | 0.95% |
Alternatives | -31.04 | 3,002.37 | -1.03% |
Total: | 3,946.89 | 1,862,520.18 | 0.21% |
Top 10 Volume Surprises, Funds >$50 mm AUM
Ticker | Name | Average Volume (30 Day) | 1 Week Average Volume | % of Average |
VNQI | Vanguard Global ex-U.S. Real Estate | 478,003 | 11,226,466 | 469.72% |
IWX | iShares Russell Top 200 Value | 27,049 | 628,607 | 464.79% |
EWK | iShares MSCI Belgium Capped | 125,870 | 2,393,047 | 380.24% |
PWB | PowerShares Dynamic Large Cap Growth | 42,381 | 785,234 | 370.56% |
NFO | Guggenheim Insider Sentiment | 24,475 | 439,500 | 359.14% |
IFSM | iShares Developed Small-Cap ex North America | 8,195 | 136,052 | 332.04% |
RYJ | Guggenheim Raymond James SB-1 Equity | 51,268 | 842,719 | 328.75% |
HYS | PIMCO 0-5 Year High Yield Corporate Bond | 520,295 | 8,290,031 | 318.67% |
LDUR | PIMCO Low Duration | 526 | 8,308 | 315.88% |
TUZ | PIMCO 1-3 Year U.S. Treasury | 22,014 | 289,470 | 262.99% |
Top 10 Weekly Performers, Excluding Leverage/Inverse Funds and <1,000 Shares Traded
Ticker | Name | Weekly Performance | Weekly Volume | AUM ($, mm) |
QDEM | Market Vectors MSCI Emerging Markets Quality Dividend | 10.38% | 1,073 | 5.42 |
EEH | ELEMENTS Linked to SPECTRUM Large Cap U.S. Momentum ETN | 9.19% | 1,097 | 0.94 |
IDXJ | Market Vectors Indonesia Small Cap | 7.75% | 274,738 | 7.16 |
EIDO | iShares MSCI Indonesia | 7.44% | 5,025,504 | 530.33 |
IDX | Market Vectors Indonesia | 6.69% | 1,061,592 | 234.85 |
QAT | iShares MSCI Qatar Capped | 5.62% | 34,136 | 33.68 |
UBM | ETRACS CMCI Industrial Metals Total Return ETN | 5.29% | 2,400 | 4.84 |
GDXJ | Market Vectors Junior Gold Miners | 5.08% | 36,651,470 | 2,490.27 |
HEVY | iPath Pure Beta Industrial Metals ETN | 4.74% | 1,193 | 0.69 |
GLDX | Global X Gold Explorers | 4.63% | 278,847 | 53.81 |
Bottom 10 Weekly Performers, Excluding Leverage/Inverse Funds and <1,000 Shares Traded
Ticker | Name | Weekly Performance | Weekly Volume | AUM ($, mm) |
PGAL | Global X FTSE Portugal 20 | -9.76% | 420,633 | 22.48 |
FUE | ELEMENTS MLCX Biofuels Total Return ETN | -9.69% | 21,849 | 0.96 |
GRN | iPath Global Carbon ETN | -9.23% | 5,082 | 1.76 |
SCIF | Market Vectors India Small-Cap | -9.04% | 1,222,542 | 402.24 |
SCIN | EGShares India Small Cap | -8.72% | 338,380 | 32.02 |
CTNN | iPath Pure Beta Cotton ETN | -7.25% | 10,398 | 2.04 |
XBI | SPDR S&P Biotech | -7.07% | 2,479,233 | 1,114.38 |
GREK | Global X FTSE Greece 20 | -6.83% | 1,757,375 | 243.80 |
INXX | EGShares India Infrastructure | -6.73% | 476,456 | 63.81 |
GAZ | iPath Dow Jones-UBS Natural Gas Total Return ETN | -6.62% | 213,367 | 26.36 |
Top 10 YTD Performers
Ticker | Name | YTD Performance | Weekly Performance | AUM ($, mm) |
JNUG | Direxion Daily Junior Gold Miners Bull 3X | 93.21 | 15.52 | 202.98 |
NUGT | Direxion Daily Gold Miners Bull 3X | 71.40 | 1.38 | 813.91 |
SOXL | Direxion Daily Semiconductor Bull 3X | 69.55 | -1.36 | 116.99 |
DRN | Direxion Daily Real Estate Bull 3x | 62.43 | 1.70 | 95.50 |
INDL | Direxion Daily India Bull 3X | 60.60 | -11.97 | 64.57 |
DDP | PowerShares DB Commodity Short ETN | 52.52 | 2.15 | 2.23 |
GLDX | Global X Gold Explorers | 52.18 | 4.63 | 53.81 |
SCIF | Market Vectors India Small-Cap | 51.04 | -9.04 | 402.24 |
SILJ | PureFunds ISE Junior Silver (Small Cap Miners/Explorers) | 49.05 | 2.43 | 9.00 |
AGA | PowerShares DB Agriculture Double Short ETN | 47.70 | 9.71 | 2.10 |
Bottom 10 YTD Performers
Ticker | Name | YTD Performance | Weekly Performance | AUM ($, mm) |
JDST | Direxion Daily Junior Gold Miners Bear 3X | -83.69 | -17.30 | 72.80 |
DUST | Direxion Daily Gold Miners Bear 3X | -63.68 | -3.56 | 248.86 |
CVOL | C-Tracks Citi Volatility ETN | -61.18 | 3.13 | 5.28 |
TVIX | VelocityShares Daily 2X VIX Short Term ETN | -60.40 | 7.22 | 161.41 |
UVXY | ProShares Ultra VIX Short-Term Futures | -60.29 | 7.68 | 284.76 |
DGAZ | VelocityShares 3X Inverse Natural Gas ETN | -56.56 | 17.43 | 339.15 |
SOXS | Direxion Daily Semiconductor Bear 3X | -48.56 | 0.84 | 21.25 |
GASX | Direxion Daily Natural Gas Related Bear 3X Shares | -44.35 | 9.54 | 8.64 |
DRV | Direxion Daily Real Estate Bear 3x | -42.79 | -1.21 | 11.33 |
TVIZ | VelocityShares Daily 2X VIX Mid Term ETN | -39.91 | 0.15 | 1.04 |
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.