Investors Add To ETFs Despite Inverted Yield Curve

Senior ETF Analyst

Aug 16, 2019

Reviewed by: Sumit Roy

Edited by: Sumit Roy

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.

Sumit Roy

| Contact: [email protected]

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.

View Bio Follow Author

Investors Add To ETFs Despite Inverted Yield Curve

Investors Add To ETFs Despite Inverted Yield Curve

Related Stories

Related Topics

More From Sumit Roy

Related Media