Investment Grade Bond ETFs Favored

Nov 20, 2015

Reviewed by: etf.com Staff

Edited by: etf.com Staff

A strong week for U.S. stocks translated into modest inflows for U.S. equity exchange-traded funds. The S&P 500 rallied 1.7% in the week ending Thursday, Nov. 19, fueling a relatively small $596 million into the segment. (Incidentally, the stock index rose by 3.3% in the week ending Friday, Nov. 20, but the following data runs through only Thursday.)

At the same time that ETF investors tiptoed into equities, they bought hefty positions in various bond ETFs. That's somewhat ironic, considering that the minutes to the Federal Reserve's October meeting, released on Wednesday, only strengthened the view that the central bank would hike its benchmark overnight interest rate In December for the first time in nearly 10 years.

Part of the reason for the strength in bonds this week may be anticipation of more stimulus from the European Central Bank on Dec. 3. If the ECB expands its QE program, that could pressure European bond yields (yields move inversely to price), filtering into lower U.S. yields as well.

Bonds & Oil Lead Inflows

The iShares Core U.S. Aggregate Bond ETF (AGG | A-98) picked up the most assets this week, at $890 million. The other bond fund that saw significant interest was the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD | A-77), with inflows of $449 million.

When it came to bond funds this week, investors favored quality and shunned riskier high-yield products like the SPDR Barclays High Yield ETF (JNK | B-68), which had outflows of $150 million. Plunging oil prices reduced the appeal of junk bonds, which have a heavy energy sector weighting.

That said, while the oil plunge turned off some investors from high-yield bonds, others used the drop in crude to buy the oil-futures-linked United States Oil Fund (USO | B-100). That ETF saw a notable $391 million in flows during the week.

Meanwhile, the equity ETF to see the largest inflows this week was the Vanguard FTSE Developed Markets ETF (VEA | A-93), at $529 million.

Large-Caps Lead Outflows

On the other end of the spectrum, large-cap U.S. equity ETFs saw the biggest outflows. The SPDR S&P 500 (SPY | A-98) lost $1.8 billion; the PowerShares QQQ (QQQ | A-64) lost $353 million, and the SPDR Dow Jones Industrial Average Trust (DIA | A-85) shed $282 million.

Outside U.S. equities, the emerging markets heavyweight iShares MSCI Emerging Markets ETF (EEM | B-100) saw outflows of $337 million.

Top 10 Creations (All ETFs)

Ticker	Name	Net Flows ($,mm)	AUM ($, mm)	AUM % Change
AGG	iShares Core U.S. Aggregate Bond	889.45	29,772.84	3.08%
VEA	Vanguard FTSE Developed Markets	529.11	29,102.48	1.85%
LQD	iShares iBoxx $ Investment Grade Corporate Bond	449.11	24,045.96	1.90%
USO	United States Oil	391.47	3,128.54	14.30%
XLF	Financial Select SPDR	314.51	19,225.12	1.66%
XLI	Industrial Select SPDR	224.34	6,824.34	3.40%
VOE	Vanguard Mid-Cap Value	219.94	4,353.52	5.32%
BND	Vanguard Total Bond Market	219.14	27,159.92	0.81%
AMLP	Alerian MLP	214.62	7,331.49	3.02%
UWTI	VelocityShares 3X Long Crude Oil ETN	208.33	1,070.59	24.16%

Top 10 Redemptions (All ETFs)

Ticker	Name	Net Flows ($,mm)	AUM ($, mm)	AUM % Change
SPY	SPDR S&P 500	-1,812.73	178,841.63	-1.00%
QQQ	PowerShares QQQ	-353.33	42,902.83	-0.82%
EEM	iShares MSCI Emerging Markets	-336.82	22,584.46	-1.47%
DIA	SPDR Dow Jones Industrial Average Trust	-282.25	12,433.84	-2.22%
IWM	iShares Russell 2000	-257.10	27,608.30	-0.92%
IVV	iShares Core S&P 500	-204.76	69,932.09	-0.29%
JNK	SPDR Barclays High Yield Bond	-150.12	10,621.03	-1.39%
IWB	iShares Russell 1000	-148.77	15,025.21	-0.98%
IWN	iShares Russell 2000 Value	-127.40	5,869.84	-2.12%
VCR	Vanguard Consumer Discretionary	-122.02	2,019.55	-5.70%

ETF Weekly Flows By Asset Class

	Net Flows ($, mm)	AUM ($, mm)	% of AUM
U.S. Equity	595.86	1,184,423.37	0.01%
International Equity	363.90	495,059.92	0.01%
U.S. Fixed Income	1,745.48	329,220.77	0.11%
International Fixed Income	462.88	27,361.11	0.34%
Commodities	576.23	48,178.77	0.24%
Currency	-22.76	1,934.34	-0.24%
Leveraged	1,152.56	24,583.91	0.97%
Inverse	-315.53	19,226.80	-0.32%
Asset Allocation	-4.86	5,441.70	-0.02%
Alternatives	56.77	3,314.47	0.34%
Total:	4,610.53	2,138,745.16	0.04%

Top 10 Volume Surprises, Funds >$50 mm AUM

Ticker	Name	Average Volume (30 Day)	1 Week Average Volume	% of Average
DGT	SPDR Global Dow	4,053	17,701	436.74%
QCLN	First Trust NASDAQ Clean Edge Green Energy	24,638	70,742	287.13%
TIPZ	PIMCO Broad U.S. TIPS	14,953	37,283	249.33%
SPYV	SPDR S&P 500 Value	8,456	20,642	244.10%
DBKO	Deutsche X-trackers MSCI South Korea Hedged Equity ETF	265,983	547,446	205.82%
LTPZ	PIMCO 15+ Year U.S. TIPS	24,520	50,109	204.36%
IWR	iShares Russell Mid-Cap	298,265	740,046	248.12%
IUSB	iShares Core Total USD Bond Market	7,845	18,752	239.03%
ATMP	Barclays ETN+ Select MLP ETN	128,900	267,979	207.90%
BSJI	Guggenheim BulletShares 2018 High Yield Corporate Bond	275,920	672,135	243.60%

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

Ticker	Name	Weekly Performance	Weekly Volume	AUM ($, mm)
ERUS	iShares MSCI Russia Capped	8.92%	3,674,554	241.94
RSX	Market Vectors Russia	8.52%	70,896,850	1,949.98
RBL	SPDR S&P Russia	7.28%	28,808	26.02
CNHX	CSOP MSCI China A International Hedged	6.88%	4,200	3.16
EWZ	iShares MSCI Brazil Capped	6.08%	88,426,744	1,983.29
RTM	Guggenheim S&P Equal Weight Materials	5.41%	12,412	56.06
PYZ	PowerShares DWA Basic Materials Momentum	5.27%	36,657	64.04
GRID	First Trust NASDAQ Clean Edge Smart Grid Infrastructure	5.12%	2,283	11.50
PLTM	First Trust ISE Global Platinum	4.92%	50,434	5.14
XPH	SPDR S&P Pharmaceuticals	4.89%	428,476	706.42

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

Ticker	Name	Weekly Performance	Weekly Volume	AUM ($, mm)
CVOL	C-Tracks Citi Volatility ETN	-7.68%	750,832	3.02
JJE	iPath Bloomberg Energy Subindex Total Return ETN	-7.16%	4,545	1.05
ICOL	iShares MSCI Colombia Capped	-5.60%	76,649	13.14
GXG	Global X MSCI Colombia	-5.18%	790,407	57.44
JJN	iPath Bloomberg Nickel Subindex Total Return ETN	-4.96%	4,961	5.58
JJC	iPath Bloomberg Copper Subindex Total Return ETN	-4.81%	118,749	34.27
SLVO	Credit Suisse X-Links Silver Shares Covered Call ETN	-4.52%	108,994	25.84
JJM	iPath Bloomberg Industrial Metals Subindex Total Return ETN	-4.37%	5,644	5.72
UBG	ETRACS CMCI Gold Total Return ETN	-4.35%	5,045	10.82
LEDD	iPath Pure Beta Lead ETN	-4.09%	7,600	2.30

Top 10 YTD Performers

Ticker	Name	YTD Performance	Weekly Performance	AUM ($, mm)
CNXT	Market Vectors ChinaAMC SME-ChiNext	52.69%	7.01%	58.97
DXJH	WisdomTree Japan Hedged Health Care	36.34%	2.39%	14.03
ASHS	Deutsche X-trackers Harvest CSI 500 China-A Shares Small Cap ETF	34.02%	5.54%	37.65
FDN	First Trust Dow Jones Internet	23.96%	3.49%	4,679.14
PNQI	PowerShares NASDAQ Internet	20.12%	3.97%	262.17
RSX	Market Vectors Russia	19.28%	8.45%	1,949.98
BBP	BioShares Biotechnology Products	18.80%	1.94%	23.27
DXJF	WisdomTree Japan Hedged Financials	18.73%	1.19%	26.88
DXJS	WisdomTree Japan Hedged SmallCap Equity	18.68%	1.38%	198.60
EDEN	iShares MSCI Denmark Capped	18.11%	2.94%	68.38

Bottom 10 YTD Performers

Ticker	Name	YTD Performance	Weekly Performance	AUM ($, mm)
GAZ	iPath Bloomberg Natural Gas Subindex Total Return ETN	-67.02%	-6.69%	6.38
CVOL	C-Tracks Citi Volatility ETN	-59.50%	-16.92%	3.02
XME	SPDR S&P Metals and Mining	-47.04%	1.19%	234.38
PLTM	First Trust ISE Global Platinum	-46.98%	3.43%	5.14
KOL	Market Vectors Coal	-46.83%	1.30%	49.50
FCG	First Trust ISE-Revere Natural Gas	-46.24%	-0.84%	210.50
JJN	iPath Bloomberg Nickel Subindex Total Return ETN	-45.30%	-4.80%	5.58
EWZS	iShares MSCI Brazil Small-Cap	-41.23%	4.06%	28.12
COPX	Global X Copper Miners	-40.81%	0.84%	16.75
NINI	iPath Pure Beta Nickel ETN	-40.77%	-3.16%	0.76

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.

etf.com Staff

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Investment Grade Bond ETFs Favored

Investment Grade Bond ETFs Favored

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