Investors Add To ETFs Despite Inverted Yield Curve
ETFs registered net inflows this week, even as markets panicked about the yield curve.
ETFs clawed back some of last week’s outflows this week, even as stress grew in financial markets following a rare 10-year/2-year yield curve inversion. Investors put $7 billion to work in ETFs during the week ending Thursday, Aug. 15, using the pullback in U.S. stocks to buy.
U.S. equity ETFs took in almost $5.5 billion during the period. The S&P 500 sagged as low as 2,825 on Thursday, matching its low from last week—down 6.7% from its all-time high. Weak economic data abroad and an inverted yield curve are fueling recession fears, but so far, the sell-off in U.S. stocks has been relatively modest.
The same can’t be said for international stocks. They were hammered this week following the release of exceptionally weak economic data from China and Germany. Meanwhile, a surprise election victory for a left-leaning presidential candidate in Argentina weighed on emerging markets and sent the Argentine stock market plunging by nearly 40% in a single day.
Investors pulled $3.8 billion out of international equity ETFs this week, including $1.2 billion from the iShares MSCI Emerging Markets ETF (EEM), $628 million from the iShares Core MSCI Emerging Markets ETF (IEMG) and $354 million from the iShares MSCI Europe Financials ETF (EUFN).
Relentless Rally In Bonds
Meanwhile, this week’s growing recession concerns had a positive effect on bonds. U.S. fixed income ETFs took in $4.4 billion during the period as the 30-year Treasury bond yield tumbled to a record-low 1.91% on Thursday. It was 2.6% a mere two weeks ago.
At the same time, the U.S. 10-year Treasury yield fell as low as 1.51%, briefly dipping below the yield of the U.S. two-year, in what some saw as a sign of an impending recession.
U.S. fixed income ETFs have gathered far and away the most assets of all asset classes this year—$76 billion. Year-to-date net inflows for all U.S.-listed ETFs now stand at $136.8 billion, less than the $156.1 billion at this time last year.
For a full list of this week’s top inflows and outflows, see the tables below:
Top 10 Creations (All ETFs)
| Ticker | Name | Net Flows ($,mm) | AUM ($, mm) | AUM % Change |
| QQQ | Invesco QQQ Trust | 2,299.39 | 71,664.47 | 3.21% |
| SPY | SPDR S&P 500 ETF Trust | 1,997.20 | 255,151.65 | 0.78% |
| IWM | iShares Russell 2000 ETF | 1,047.86 | 39,749.39 | 2.64% |
| HYG | iShares iBoxx USD High Yield Corporate Bond ETF | 672.59 | 17,345.06 | 3.88% |
| IEF | iShares 7-10 Year Treasury Bond ETF | 666.29 | 18,016.12 | 3.70% |
| SPLV | Invesco S&P 500 Low Volatility ETF | 609.97 | 12,411.34 | 4.91% |
| XLI | Industrial Select Sector SPDR Fund | 577.09 | 9,931.56 | 5.81% |
| USMV | iShares Edge MSCI Min Vol U.S.A. ETF | 509.21 | 31,608.35 | 1.61% |
| VOO | Vanguard S&P 500 ETF | 482.10 | 118,507.33 | 0.41% |
| ITOT | iShares Core S&P Total U.S. Stock Market ETF | 479.45 | 21,385.23 | 2.24% |
Top 10 Redemptions (All ETFs)
| Ticker | Name | Net Flows ($,mm) | AUM ($, mm) | AUM % Change |
| XLF | Financial Select Sector SPDR Fund | -1,267.15 | 20,360.19 | -6.22% |
| EEM | iShares MSCI Emerging Markets ETF | -1,190.17 | 24,914.08 | -4.78% |
| IJH | iShares Core S&P Mid-Cap ETF | -749.57 | 47,197.65 | -1.59% |
| XLK | Technology Select Sector SPDR Fund | -668.89 | 20,818.48 | -3.21% |
| IEMG | iShares Core MSCI Emerging Markets ETF | -628.20 | 51,961.45 | -1.21% |
| XLP | Consumer Staples Select Sector SPDR Fund | -382.01 | 12,780.70 | -2.99% |
| XLE | Energy Select Sector SPDR Fund | -363.78 | 9,986.72 | -3.64% |
| EUFN | iShares MSCI Europe Financials ETF | -354.47 | 605.78 | -58.51% |
| IXC | iShares Global Energy ETF | -320.79 | 845.70 | -37.93% |
| VXF | Vanguard Extended Market ETF | -317.28 | 6,988.83 | -4.54% |
ETF Weekly Flows By Asset Class
| Net Flows ($, mm) | AUM ($, mm) | % of AUM | |
| U.S. Equity | 5,482.93 | 2,193,521.42 | 0.25% |
| International Equity | -3,770.03 | 775,473.12 | -0.49% |
| U.S. Fixed Income | 4,414.91 | 704,145.89 | 0.63% |
| International Fixed Income | 100.39 | 79,958.17 | 0.13% |
| Commodities | 547.23 | 76,442.68 | 0.72% |
| Currency | 20.26 | 1,448.96 | 1.40% |
| Leveraged | 27.06 | 34,803.23 | 0.08% |
| Inverse | 331.55 | 12,758.92 | 2.60% |
| Asset Allocation | 52.87 | 9,725.65 | 0.54% |
| Alternatives | -208.00 | 4,564.23 | -4.56% |
| Total: | 6,999.17 | 3,892,842.28 | 0.18% |
Asset Classes (Year-to-Date)
| Net Flows ($, mm) | AUM ($, mm) | % of AUM | |
| U.S. Equity | 48,270.45 | 2,193,521.42 | 2.20% |
| International Equity | 231.49 | 775,473.12 | 0.03% |
| U.S. Fixed Income | 76,006.44 | 704,145.89 | 10.79% |
| International Fixed Income | 9,902.62 | 79,958.17 | 12.38% |
| Commodities | 3,695.70 | 76,442.68 | 4.83% |
| Currency | -340.22 | 1,448.96 | -23.48% |
| Leveraged | -5,416.15 | 34,803.23 | -15.56% |
| Inverse | 3,976.34 | 12,758.92 | 31.17% |
| Asset Allocation | 51.18 | 9,725.65 | 0.53% |
| Alternatives | 465.19 | 4,564.23 | 10.19% |
| Total: | 136,843.04 | 3,892,842.28 | 3.52% |
Top 10 YTD Performers
| Ticker | Name | YTD Performance | Weekly Performance | AUM ($, mm) |
| TAN | Invesco Solar ETF | 56.82% | -5.58% | 433.31 |
| JJN | iPath Series B Bloomberg Nickel Subindex Total Return ETN | 48.81% | 1.65% | 8.48 |
| PTF | Invesco DWA Technology Momentum ETF | 43.99% | -3.91% | 250.08 |
| GOAU | U.S. Global GO Gold and Precious Metal Miners ETF | 43.73% | -1.73% | 24.29 |
| RING | iShares MSCI Global Gold Miners ETF | 41.23% | -2.74% | 267.74 |
| SGDM | Sprott Gold Miners ETF | 40.16% | -2.70% | 189.88 |
| SGDJ | Sprott Junior Gold Miners ETF | 35.77% | -5.22% | 68.38 |
| PBW | Invesco WilderHill Clean Energy ETF | 34.90% | -4.84% | 174.07 |
| GDX | VanEck Vectors Gold Miners ETF | 34.71% | -3.24% | 11,511.92 |
| GOEX | Global X Gold Explorers ETF | 34.59% | -4.91% | 47.60 |
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.
