VOO’s $40B Surge Masks Noisy Week for ETF Flows

Investors added $49.7 billion to U.S.-listed ETFs last week, pushing year-to-date inflows to $1.33 trillion, a fresh record annual haul.
U.S. equity ETFs pulled in $30.6 billion, followed by international equity ETFs with $9.8 billion. Leveraged ETFs had outflows of $965 million, while inverse ETFs lost $427 million.

The data was noisy, however, with many of the flow figures influenced by heartbeat trades, which are tax-related transactions that temporarily cause inflows and outflows to swell.

In terms of individual ETFs, the Vanguard S&P 500 ETF (VOO) took in $40.5 billion in what looks like a clear case of a heartbeat trade that’s likely to reverse. Still, the inflows were enough to balloon year-to-date inflows for the ETF to a whopping $163.7 billion, blowing past all records for a single ETF’s year-to-date inflows.

On the flip side, the iShares Core S&P 500 ETF (IVV) shed $51.8 billion in what is also a typical quarter-end pattern we see. While VOO sees big inflows followed by outflows, the pattern is often the opposite for IVV.

The Schwab International Equity ETF (SCHF) was the biggest international stock winner of the week, with $1.5 billion of inflows that look likely to stand. The Invesco S&P 500 Equal Weight ETF (RSP) also took in $1.5 billion in what appears to be legitimate demand.

On the outflows side, IVV was far and away the biggest loser. It was followed by the Invesco QQQ Trust (QQQ), which shed $2.2 billion, the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), which lost $1.4 billion, and the Direxion Daily Semiconductor Bull 3x Shares (SOXL), which fell by $1 billion.

Last week's flows came amid a choppy market backdrop. The S&P 500 challenged its all-time high during the week but failed to break through. A post-earnings drop in Broadcom, one of the market’s biggest AI winners, soured sentiment across AI-related technology stocks. 

Meanwhile, the Federal Reserve cut rates by 25 basis points as expected, but the 10-year Treasury yield hovered near three-month highs as investors priced in the idea that the move could be the last rate cut for at least a few months.

For a full list of last week’s top ETF inflows and outflows, see the tables below.