ETFs Gain $9.5B In Risk-Off Week

Heightening tensions between Russia and the West over Ukraine piled onto inflation and Federal Reserve rate hikes, giving investors reason to put only $9.5 billion into U.S.-listed ETFs last week versus $24 billion the week prior. 

The U.S. ETF industry has now gained just over $91 billion in new assets this year, according to ETF.com data provider FactSet, and holds $6.8 trillion in assets under management. 

Heading Into Bond Safe Havens 

Although the iShares Russell 2000 ETF (IWM) and the Invesco QQQ Trust (QQQ) led inflows on the week, with a respective $1.6 billion and $1.5 billion, most of the largest-inflow ETFs on the week were in U.S. fixed income. That asset class added a net $2.95 billion in the period compared to net outflows of $3.94 billion last week. 

The Vanguard Intermediate-Term Corporate Bond (VCIT) led fixed income funds, with $1.1 billion on the week, followed by the Vanguard International Bond ETF (BNDX) and the Vanguard Short-Term Treasury Index ETF (VGSH) at $751 million and just under $700 million, respectively.  

The iShares 20+ Year Treasury Bond ETF (TLT) and the SPDR Bloomberg High Yield Bond ETF (JNK) also appeared in the top 10 list, with $548 million and $536 million, respectively, suggesting demand for fixed income safety ranging from Treasuries to riskier corporate bonds. 

One notable inflow on the week was a $624 million inflow for the iShares Paris-Aligned Climate MSCI USA ETF (PABU), the latest ESG fund from BlackRock, which debuted on Feb. 8. All of those assets came last Thursday, but it’s not clear if the inflow is the first leg of a heartbeat trade or an allocation from BlackRock itself. The firm declined to comment.

Broad Selloffs In Equities 

The U.S. equities asset class generally dominates inflows but only managed to add a meager $2.6 billion last week. 

Notably, international equities saw a $3.7 billion outflow from the iShares MSCI Kokusai ETF (TOK). The ex-Japan international equity fund barely registers flows on a daily basis but had a massive $3.7 billion inflow in January that was later withdrawn in two tranches in what appears to be a wash trade last week. 

The far more liquid SPDR S&P 500 ETF Trust (SPY) saw the second-largest outflows, with $2.3 billion pulled, marking more than $25 billion in withdrawals year-to-date. 

Losses were scattered across strategies for other equity ETFs on the week. The Vanguard Mid-Cap ETF (VO) and the Vanguard Mid-Cap Growth ETF (VOT) lost $991 million and $357 million, respectively, while the sector-specific Financial Select Sector SPDR Fund (XLF) and the Vanguard Information Technology ETF (VGT) lost $986 million and $720 million, respectively. 

Three fixed income ETFs also dotted the lower end of the biggest outflows list, with the iShares JP Morgan USD Emerging Markets Bond ETF (EMB) losing $503 million due to its 3.3% weighting to Russian debt. 

The Vanguard Intermediate-Term Treasury Index ETF (VGIT) and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) lost $386 million and $365 million, respectively. 
 

For a full list of last week’s top inflows and outflows, see the tables below: 

Top 10 Creations (All ETFs)

Top 10 Redemptions (All ETFs)

ETF Weekly Flows By Asset Class

Asset Classes (Year-to-Date)

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

Top 10 YTD Performers

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.