Massive Weekly Inflows For Russell-Indexed ETFs

Sumit Roy

Senior ETF Analyst

Jun 22, 2018

Reviewed by: Sumit Roy

Edited by: Sumit Roy

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ETF flows were salvaged this week as the Russell reconstitution trade offset trade war concerns. On net, $7.5 billion flowed into U.S.-listed ETFs during the week ending Thursday, June 21, according to FactSet.

Heading into Thursday, ETFs were on track for net outflows of nearly $10 billion as traders eased up on their equity positions amid rising trade tensions between the U.S. and China. But then Thursday rolled around, and a whopping $16.5 billion flooded into ETFs—mostly funds tracking Russell indices.

That's likely no coincidence. After the market close today (Friday, June 22), Russell will reconstitute all of its U.S. Russell indices, including the popular Russell 1000 and Russell 2000 indices. Funds tracking those indices will have to buy and sell stocks based on the new index makeup.

Heavy Trading

The event typically leads to heavy trading activity in the U.S. stock market. When Russell indices rebalance, it's typically one of the highest-volume days of the year.

Ahead of the reconstitution, ETFs tracking Russell indices saw a flurry of activity—perhaps related to some investors using sophisticated trading strategies to profit from the annual event. Eight of the top 10 ETFs with the largest inflows this week were iShares Russell ETFs, including the iShares Russell 1000 Growth ETF (IWF), the iShares Russell 1000 Value ETF (IWD) and the iShares Russell 2000 Value ETF (IWN).

Inflows into those funds helped offset sizable outflows from the likes of the Vanguard High Dividend Yield ETF (VYM), the iShares MSCI Emerging Markets ETF (EEM) and the Vanguard Small-Cap ETF (VB).

On net, $11 billion flowed into U.S. equity ETFs during the week, and $480 million went into U.S. fixed-income ETFs. On the other hand, international equity ETFs had net outflows of $3.4 billion.

Year-to-date inflows for all U.S.-listed ETFs now stand at $142.5 billion.

Top 10 Creations (All ETFs)

Ticker	Name	Net Flows ($,mm)	AUM ($, mm)	AUM % Change
IWF	iShares Russell 1000 Growth ETF	4,130.99	47,771.75	9.47%
SPY	SPDR S&P 500 ETF Trust	2,765.95	268,854.08	1.04%
IWD	iShares Russell 1000 Value ETF	2,514.74	39,019.61	6.89%
QQQ	Invesco QQQ Trust	2,311.11	69,008.39	3.47%
IWN	iShares Russell 2000 Value ETF	1,843.68	12,355.63	17.54%
IWP	iShares Russell Mid-Cap Growth ETF	1,812.54	10,948.62	19.84%
IWM	iShares Russell 2000 ETF	1,808.89	50,194.18	3.74%
IWS	iShares Russell Mid-Cap Value ETF	1,361.86	12,198.75	12.57%
IWO	iShares Russell 2000 Growth ETF	1,274.20	12,411.06	11.44%
IWV	iShares Russell 3000 ETF	895.60	9,562.87	10.33%

Top 10 Redemptions (All ETFs)

Ticker	Name	Net Flows ($,mm)	AUM ($, mm)	AUM % Change
VYM	Vanguard High Dividend Yield ETF	-3,109.78	21,218.23	-12.78%
EEM	iShares MSCI Emerging Markets ETF	-2,932.10	32,666.67	-8.24%
VB	Vanguard Small-Cap ETF	-1,940.47	24,332.88	-7.39%
XLF	Financial Select Sector SPDR Fund	-1,202.07	31,018.30	-3.73%
IJH	iShares Core S&P Mid-Cap ETF	-957.36	48,283.15	-1.94%
EFA	iShares MSCI EAFE ETF	-949.00	73,643.08	-1.27%
VBK	Vanguard Small-Cap Growth ETF	-782.50	8,490.78	-8.44%
XLI	Industrial Select Sector SPDR Fund	-614.68	12,007.54	-4.87%
HYG	iShares iBoxx USD High Yield Corporate Bond ETF	-600.81	14,755.28	-3.91%
IVV	iShares Core S&P 500 ETF	-586.41	151,503.08	-0.39%

ETF Weekly Flows By Asset Class

	Net Flows ($, mm)	AUM ($, mm)	% of AUM
U.S. Equity	11,040.67	2,064,442.75	0.53%
International Equity	-3,378.53	808,216.00	-0.42%
U.S. Fixed Income	476.28	547,098.36	0.09%
International Fixed Income	222.82	61,912.37	0.36%
Commodities	-200.43	67,019.51	-0.30%
Currency	-0.78	1,206.39	-0.06%
Leveraged	-327.69	36,082.03	-0.91%
Inverse	-185.79	13,179.73	-1.41%
Asset Allocation	-112.24	9,332.86	-1.20%
Alternatives	-61.16	4,303.66	-1.42%
Total:	7,473.14	3,612,793.67	0.21%

Top 10 Volume Surprises, Funds >$50 mm AUM

Ticker	Name	Average Volume (30 Day)	1 Week Average Volume	% of Average
AGT	iShares MSCI Argentina and Global Exposure ETF	19,761	96,644	489.06%
HOLD	AdvisorShares Sage Core Reserves ETF	727	2,954	406.34%
DMRM	DeltaShares S&P 400 Managed Risk ETF	1,915	6,953	363.04%
ARCM	Arrow Reserve Capital Management ETF	93	248	267.32%
VXXB	iPath Series B S&P 500 VIX Short Term Futures ETN	5,362	17,887	333.58%
FSZ	First Trust Switzerland AlphaDEX Fund	6,742	19,432	288.20%
CLTL	Invesco Treasury Collateral ETF	654	1,662	254.17%
BICK	First Trust BICK Index Fund	7,463	21,742	291.32%
DMRL	DeltaShares S&P 500 Managed Risk ETF	3,539	8,386	236.99%
FNX	First Trust Mid Cap Core AlphaDEX Fund	45,284	141,086	311.56%

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

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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.

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