Market Turmoil Spooks Bonds, Not Equities

Investors pulled money out of U.S.-listed ETFs this week, but equity ETFs registered inflows, while fixed-income ETFs registered outflows.

sumit
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Senior ETF Analyst
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Reviewed by: Sumit Roy
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Edited by: Sumit Roy

Tumultuous action in the stock and bond markets sent investors fleeing ETFs. The S&P 500 had its biggest drawdown since March this week, and the U.S. 10-year Treasury yield spiked to a seven-year high, prompting $2.9 billion to flow out of U.S.-listed ETFs.

Despite the stock market volatility—the S&P 500 fell as much as 7.8% from its all-time high—it wasn’t stocks that most ETF investors were dumping. In fact, almost $2 billion flowed into U.S. equity ETFs, according to the latest data from FactSet.

Conversely, a hefty $6.2 billion came out of U.S. fixed-income ETFs as the jump in Treasury yields spooked fixed-income investors out of their positions.

Corporate bond ETFs, in particular, fell swiftly out of favor. Funds like the iShares iBoxx USD High Yield Corporate Bond ETF (HYG), the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) and the iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD) had billions of dollars worth of outflows this week.

But not all fixed-income ETFs were shunned. The iShares 20+ Year Treasury Bond ETF (TLT) and the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) actually found themselves on the top inflows list for the week, as some investors used the bond sell-off to lock in higher rates.

Meanwhile, on the equity side, the SPDR S&P 500 ETF Trust (SPY), the Vanguard S&P 500 ETF Trust (VOO), the iShares MSCI Japan ETF (EWJ) and the J.P. Morgan Alerian MLP Index ETN (AMJ) had the largest inflows during the week.

Though stocks fell notably this week, the data suggest that ETF investors weren’t panicking; on the contrary, they used the pullback as an opportunity to buy.

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
SPYSPDR S&P 500 ETF Trust5,653.29273,776.352.11%
VOOVanguard S&P 500 ETF1,187.29101,320.901.19%
DIASPDR Dow Jones Industrial Average ETF Trust684.4122,862.873.09%
TLTiShares 20+ Year Treasury Bond ETF586.938,423.427.49%
EWJiShares MSCI Japan ETF567.2617,360.203.38%
TQQQProShares UltraPro QQQ519.053,812.8515.76%
AMJJ.P. Morgan Alerian MLP Index ETN511.403,793.3615.58%
XLCCommunication Services Select Sector SPDR Fund491.382,766.5121.60%
BILSPDR Bloomberg Barclays 1-3 Month T-Bill ETF466.484,010.6513.16%
IXUSiShares Core MSCI Total International Stock ETF411.8410,887.393.93%

Top 10 Redemptions (All ETFs)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
HYGiShares iBoxx USD High Yield Corporate Bond ETF-2,756.1613,051.40-17.44%
IWBiShares Russell 1000 ETF-2,754.0417,631.66-13.51%
AGGiShares Core U.S. Aggregate Bond ETF-2,193.7753,189.39-3.96%
JNKSPDR Bloomberg Barclays High Yield Bond ETF-1,333.438,003.89-14.28%
LQDiShares iBoxx USD Investment Grade Corporate Bond ETF-1,243.0132,192.09-3.72%
QQQInvesco QQQ Trust-712.2666,004.52-1.07%
XOPSPDR S&P Oil & Gas Exploration & Production ETF-547.183,142.11-14.83%
ICFiShares Cohen & Steers REIT ETF-528.431,901.04-21.75%
XLIIndustrial Select Sector SPDR Fund-451.6812,257.10-3.55%
XLKTechnology Select Sector SPDR Fund-435.5620,490.91-2.08%

ETF Weekly Flows By Asset Class

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity1,951.312,076,683.810.09%
International Equity318.61759,588.890.04%
U.S. Fixed Income-6,166.70558,161.17-1.10%
International Fixed Income182.3965,313.890.28%
Commodities 346.9259,743.310.58%
Currency7.451,096.910.68%
Leveraged945.4135,236.632.68%
Inverse-350.5013,602.24-2.58%
Asset Allocation14.909,196.070.16%
Alternatives-147.904,983.71-2.97%
Total:-2,898.123,583,606.63-0.08%

Asset Classes (Year-to-Date)

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity99,712.502,076,683.814.80%
International Equity38,044.66759,588.895.01%
U.S. Fixed Income52,289.81558,161.179.37%
International Fixed Income10,076.2465,313.8915.43%
Commodities -1,221.8159,743.31-2.05%
Currency-85.311,096.91-7.78%
Leveraged4,341.6335,236.6312.32%
Inverse2,532.8113,602.2418.62%
Asset Allocation684.339,196.077.44%
Alternatives545.564,983.7110.95%
Total:206,920.443,583,606.635.77%

Top 10 Volume Surprises, Funds >$50 mm AUM

TickerNameAverage Volume
(30 Day)
1 Week Average
Volume
% of Average
AGGEIQ Enhanced Core Bond U.S. ETF44,504298,609670.96%
PSCPrincipal U.S. Small-Cap Multi-Factor Index ETF1,1884,823406.02%
ROBOROBO Global Robotics and Automation Index ETF403,2161,554,020385.41%
QEFASPDR MSCI EAFE StrategicFactors ETF30,566116,290380.45%
AGGPIQ Enhanced Core Plus Bond U.S. ETF126,992471,678371.42%
JPMBJPMorgan USD Emerging Markets Sovereign Bond ETF1,2464,432355.79%
ARCMArrow Reserve Capital Management ETF101353351.19%
CLRGIQ Chaikin U.S. Large Cap ETF211,551712,075336.60%
XNTKSPDR NYSE Technology ETF26,20884,478322.34%
VMOTAlpha Architect Value Momentum Trend ETF20,13062,329309.64%

 

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.