Investors Add To ETFs Despite Inverted Yield Curve

ETFs registered net inflows this week, even as markets panicked about the yield curve.

sumit
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Senior ETF Analyst
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Reviewed by: Sumit Roy
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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)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
QQQInvesco QQQ Trust2,299.3971,664.473.21%
SPYSPDR S&P 500 ETF Trust1,997.20255,151.650.78%
IWMiShares Russell 2000 ETF1,047.8639,749.392.64%
HYGiShares iBoxx USD High Yield Corporate Bond ETF672.5917,345.063.88%
IEFiShares 7-10 Year Treasury Bond ETF666.2918,016.123.70%
SPLVInvesco S&P 500 Low Volatility ETF609.9712,411.344.91%
XLIIndustrial Select Sector SPDR Fund577.099,931.565.81%
USMViShares Edge MSCI Min Vol U.S.A. ETF509.2131,608.351.61%
VOOVanguard S&P 500 ETF482.10118,507.330.41%
ITOTiShares Core S&P Total U.S. Stock Market ETF479.4521,385.232.24%

 

Top 10 Redemptions (All ETFs)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
XLFFinancial Select Sector SPDR Fund-1,267.1520,360.19-6.22%
EEMiShares MSCI Emerging Markets ETF-1,190.1724,914.08-4.78%
IJHiShares Core S&P Mid-Cap ETF-749.5747,197.65-1.59%
XLKTechnology Select Sector SPDR Fund-668.8920,818.48-3.21%
IEMGiShares Core MSCI Emerging Markets ETF-628.2051,961.45-1.21%
XLPConsumer Staples Select Sector SPDR Fund-382.0112,780.70-2.99%
XLEEnergy Select Sector SPDR Fund-363.789,986.72-3.64%
EUFNiShares MSCI Europe Financials ETF-354.47605.78-58.51%
IXCiShares Global Energy ETF-320.79845.70-37.93%
VXFVanguard Extended Market ETF-317.286,988.83-4.54%

 

ETF Weekly Flows By Asset Class

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity5,482.932,193,521.420.25%
International Equity-3,770.03775,473.12-0.49%
U.S. Fixed Income4,414.91704,145.890.63%
International Fixed Income100.3979,958.170.13%
Commodities 547.2376,442.680.72%
Currency20.261,448.961.40%
Leveraged27.0634,803.230.08%
Inverse331.5512,758.922.60%
Asset Allocation52.879,725.650.54%
Alternatives-208.004,564.23-4.56%
Total:6,999.173,892,842.280.18%

 

Asset Classes (Year-to-Date)

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity48,270.452,193,521.422.20%
International Equity231.49775,473.120.03%
U.S. Fixed Income76,006.44704,145.8910.79%
International Fixed Income9,902.6279,958.1712.38%
Commodities 3,695.7076,442.684.83%
Currency-340.221,448.96-23.48%
Leveraged-5,416.1534,803.23-15.56%
Inverse3,976.3412,758.9231.17%
Asset Allocation51.189,725.650.53%
Alternatives465.194,564.2310.19%
Total:136,843.043,892,842.283.52%

 

Top 10 YTD Performers

TickerNameYTD PerformanceWeekly PerformanceAUM ($, mm)
TANInvesco Solar ETF56.82%-5.58%433.31
JJNiPath Series B Bloomberg Nickel Subindex Total Return ETN48.81%1.65%8.48
PTFInvesco DWA Technology Momentum ETF43.99%-3.91%250.08
GOAUU.S. Global GO Gold and Precious Metal Miners ETF43.73%-1.73%24.29
RINGiShares MSCI Global Gold Miners ETF41.23%-2.74%267.74
SGDMSprott Gold Miners ETF40.16%-2.70%189.88
SGDJSprott Junior Gold Miners ETF35.77%-5.22%68.38
PBWInvesco WilderHill Clean Energy ETF34.90%-4.84%174.07
GDXVanEck Vectors Gold Miners ETF34.71%-3.24%11,511.92
GOEXGlobal X Gold Explorers ETF34.59%-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 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.