'SPY' & Junk Bond ETFs Drag Down Weekly Flows
Weekly ETF flows remained in positive territory but were weighed down by outflows from several notable funds.
The first stock market sell-off in nine weeks didn't sap investors' appetite for exchange-traded funds, but it did lead to sizable outflows from one ETF in particular.
Though it was only down fractionally week-over-week, the S&P 500 was on track to break its eight-week winning streak on Friday. Concerns about the Senate's version of the tax reform bill, which would delay the implementation of corporate tax cuts by a year, were enough to spur some profit-taking in the red-hot stock market.
Still, ETFs as a whole took in $3.3 billion in new money during the week ending Thursday, Nov. 9, according to FactSet. Inflows of $3.7 billion into international equity ETFs and $774 million into U.S. fixed-income ETFs were enough to offset the nearly $1 billion worth of outflows from U.S. equity ETFs.
'SPY' A Big Drag
This marks the first time investors pulled money from U.S. equity ETFs on a weekly basis since late September. One fund in particular was responsible for snapping the streak, the SPDR S&P 500 ETF Trust (SPY).
SPY's weekly outflows of $6.1 billion were far and away the most of any fund. The fund has seemingly been a popular vehicle for traders expressing short-term market views, but it hasn't gained much traction with longer-term investors this year, who have gravitated toward cheaper rivals.
Year-to-date, SPY has outflows of $11.3 billion, while the iShares Core S&P 500 ETF (IVV) and the Vanguard S&P 500 Index Fund (VOO) have inflows of $28.2 billion and $13.4 billion, respectively.
ETFs as a whole now have year-to-date inflows of $392.1 billion, a new annual record.
High-Yield Correction
Aside from SPY, other big losers included the iShares 20+ Year Treasury Bond ETF (TLT) and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG), with redemptions of $703 million and $561 million, respectively.
The U.S. 10-year Treasury bond yield eclipsed 2.4% this week for the first time since the end of last month, as traders looked toward a likely Fed hike in December. Meanwhile, junk bond ETFs such as HYG touched a seven-month low on Thursday, as investors fretted about the state of the high-yield market following some bad earnings news from distressed borrowers.
Another area to see notable outflows during the week: energy. The VelocityShares 3X Long Natural Gas ETN (UGAZ), the United States Oil Fund (USO) and the Energy Select Sector SPDR Fund (XLE) each found themselves on the outflows list for the week.
Traders apparently used a run-up in energy prices during the period to take profits on ETFs tied to the space.
For a full list of this week's top inflows and outflows, see the tables below:
Top 10 Creations (All ETFs)
| Ticker | Name | Net Flows ($,mm) | AUM ($, mm) | AUM % Change |
| VOO | Vanguard S&P 500 ETF | 594.34 | 79,106.28 | 0.76% |
| EWJ | iShares MSCI Japan ETF | 539.22 | 18,345.38 | 3.03% |
| IVV | iShares Core S&P 500 ETF | 520.34 | 134,770.92 | 0.39% |
| VEA | Vanguard FTSE Developed Markets ETF | 421.31 | 66,307.11 | 0.64% |
| EZU | iShares MSCI Eurozone ETF | 385.45 | 14,809.35 | 2.67% |
| LQD | iShares iBoxx $ Investment Grade Corporate Bond ETF | 374.98 | 39,025.28 | 0.97% |
| QQQ | PowerShares QQQ Trust | 330.12 | 57,611.72 | 0.58% |
| DBC | PowerShares DB Commodity Index Tracking Fund | 273.79 | 2,402.10 | 12.86% |
| VGK | Vanguard FTSE Europe ETF | 246.04 | 18,006.92 | 1.39% |
| VTV | Vanguard Value ETF | 224.71 | 34,742.76 | 0.65% |
Top 10 Redemptions (All ETFs)
| Ticker | Name | Net Flows ($,mm) | AUM ($, mm) | AUM % Change |
| SPY | SPDR S&P 500 ETF Trust | -6,144.04 | 248,496.57 | -2.41% |
| IWM | iShares Russell 2000 ETF | -877.70 | 41,911.42 | -2.05% |
| TLT | iShares 20+ Year Treasury Bond ETF | -702.63 | 7,328.93 | -8.75% |
| HYG | iShares iBoxx $ High Yield Corporate Bond ETF | -560.89 | 18,718.33 | -2.91% |
| UGAZ | VelocityShares 3X Long Natural Gas ETN | -343.48 | 847.56 | -28.84% |
| JNK | SPDR Bloomberg Barclays High Yield Bond ETF | -332.24 | 12,590.24 | -2.57% |
| FXU | First Trust Utilities AlphaDEX Fund | -261.51 | 943.81 | -21.70% |
| USO | United States Oil Fund LP | -239.43 | 2,116.65 | -10.16% |
| XLF | Financial Select Sector SPDR Fund | -214.86 | 28,670.21 | -0.74% |
| XLE | Energy Select Sector SPDR Fund | -193.36 | 17,019.36 | -1.12% |
ETF Weekly Flows By Asset Class
| Net Flows ($, mm) | AUM ($, mm) | % of AUM | |
| U.S. Equity | -994.15 | 1,817,025.37 | -0.05% |
| International Equity | 3,701.50 | 774,170.18 | 0.48% |
| U.S. Fixed Income | 773.96 | 516,284.94 | 0.15% |
| International Fixed Income | -25.59 | 55,989.86 | -0.05% |
| Commodities | -135.68 | 66,276.28 | -0.20% |
| Currency | -25.79 | 1,325.54 | -1.95% |
| Leveraged | -357.18 | 31,677.12 | -1.13% |
| Inverse | 319.75 | 17,155.57 | 1.86% |
| Asset Allocation | 24.15 | 8,695.50 | 0.28% |
| Alternatives | -15.53 | 4,178.22 | -0.37% |
| Total: | 3,265.43 | 3,292,778.57 | 0.10% |
Top 10 Volume Surprises, Funds >$50 mm AUM
| Ticker | Name | Average Volume (30 Day) | 1 Week Average Volume | % of Average |
| GDVD | Principal Active Global Dividend Income ETF | 812 | 4,703 | 579.08% |
| FXL | First Trust Technology AlphaDEX Fund | 190,947 | 874,263 | 457.86% |
| FXU | First Trust Utilities AlphaDEX Fund | 619,249 | 2,161,561 | 349.06% |
| JPME | JPMorgan Diversified Return U.S. Mid Cap Equity ETF | 18,011 | 47,425 | 263.30% |
| MLPZ | ETRACS 2xMonthly Leveraged S&P MLP Index ETN Series B | 1,203 | 5,978 | 497.09% |
| JPGB | JPMorgan Global Bond Opportunities ETF | 3,391 | 10,539 | 310.83% |
| DGRE | WisdomTree Emerging Markets Quality Dividend Growth Fund | 24,483 | 75,965 | 310.27% |
| IBDC | iShares iBonds Mar 2020 Term Corporate ETF | 16,280 | 35,105 | 215.63% |
| MUNI | PIMCO Intermediate Municipal Bond Active ETF | 15,479 | 37,779 | 244.07% |
| DGT | SPDR Global Dow ETF | 2,015 | 4,609 | 228.74% |
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.
