Muted Weekly ETF Inflows Of $4B

Angst over whether or not the Senate could come to an agreement over avoiding a first-ever default of the U.S. government left net flows paralyzed for much of the week.

U.S.-listed ETFs generated just more than $4.3 billion in net inflows between Oct. 1 and Oct. 7, according to ETF.com data provider FactSet. The space has gained a net $652.3 billion in assets so far this year, and now has more than $6.64 trillion in assets under management.

International Equities Lead

Senators passed a stopgap increase to the debt ceiling that will keep the federal government from default until early December. The House, which passed a debt ceiling bill of its own in September, is expected to take up the temporary extension early next week and avert a critical shock to the global economy and its recovery from the COVID-19 pandemic.

International equity ETFs led all asset classes on the week with a net inflow of $2.8 billion versus U.S. equities, which brought in $557.8 million, marking a third time in 30 days where international stock ETFs outperformed their domestic U.S. counterparts. The iShares Core MSCI EAFE ETF (IEFA) led ETFs in inflows this week with a gain of $1.4 billion, and is the only international equity ETF to appear in the top 10 gainers.

U.S. broad market funds also saw gains, with the Vanguard S&P 500 ETF (VOO) adding almost $1.1 billion in assets, while the Vanguard Total Stock Market ETF (VTI) and iShares Russell 2000 ETF (IWM) added $630.2 million and $609.2 million, respectively.

At the same time, the SPDR S&P 500 ETF Trust (SPY) lost just over $3.9 billion.

Treasuries Shorten

U.S. fixed income ETFs lost $85.8 million on a particularly mixed week of trading that trended shorter.

The iShares 20+ Year Treasury Bond ETF (TLT) lost $2.1 billion and nearly 14% of its assets to outflows in the period as the spread between 20-year and 30-year Treasury bonds flattened to 5 basis points, with inflation worries weighing down long-term debt.

Leading inflows for bond ETFs was the iShares 1-3 Year Treasury Bond ETF (SHY), with a gain of $1.1 billion, taking advantage of yields that were driven up by the risk of default. However, the Schwab Short-Term U.S. Treasury ETF (SCHO) saw outflows of $363.5 million in the same period.

The two leading corporate debt ETFs both saw outflows on the week, with the iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD) losing $1.5 billion, while the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) lost almost $479.4 million.

Buying The Tech Dip

Rising bond yields and sell-offs in broad equities left some investors eyeing cheap tech stocks for a quick profit.

That aggressive mentality was on display as the ProShares UltraPro QQQ (TQQQ) took in $839.5 million in net inflows compared to its sister fund, the Invesco QQQ Trust (QQQ), which pulled in $663.2 million.

Retail may be the most likely source of that tech buying. According to estimates of ETF flows by retail traders from VandaTrack, QQQ had net inflows of $1.5 billion in September from self-led accounts versus $854 million in net flows overall.

For a full list of this week’s top inflows and outflows, see the tables below:

Top 10 Creations (All ETFs)

Top 10 Redemptions (All ETFs)

ETF Weekly Flows By Asset Class

Asset Classes (Year-to-Date)

Top 10 Weekly Performers, Excluding Leverage/Inverse Funds and <1,000 Shares Traded

Top 10 YTD Performers

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.