Yearly ETF Inflows Set New Record

December 16, 2016

The post-election investor stampede into ETFs continued this week, as optimism remained high about the outlook for U.S. stocks and the U.S. economy heading into 2017. Altogether, $25.4 billion came into U.S.-listed exchange-traded funds in the week ending Thursday, Dec. 15, according to FactSet. Year-to-date flows now stand at $252.8 billion, above the previous annual record of $244 billion set in 2014. 

Of this week's flows, the vast majority―or $22.1 billion―went into U.S. equity exchange-traded funds. On Tuesday, the S&P 500 hit a record-high 2,278 before paring its gains modestly later in the week after the Federal Reserve hiked interest rates for the first time in a year. As of this writing, the large-cap index was up 12.5% year-to-date, including dividends. At the same time, the small-cap Russell 2000 was up a sizzling 21.4%.

Other segments to see inflows were international equity ETFs, with net creations of $3.3 billion; and U.S. fixed-income ETFs, with net creations of $314 million. 

U.S. Treasurys continued to tumble this week following the Fed's rate increase. The 10-year bond yield hit 2.62% on the back of guidance from the central bank that suggested three more rate hikes could be coming next year (bond prices and yields move inversely). 

Meanwhile, two ETF segments to see outflows this week were international fixed income, with redemptions of $155 million; and commodities, with redemptions of $834 million.

Broad Market ETF Giants Get Bigger
In terms of individual ETFs, the biggest winners this week were ETF heavyweights such as the SPDR S&P 500 ETF (SPY) and the PowerShares QQQ Trust (QQQ), with inflows of $7.4 billion and $2.6 billion, respectively. In fact, every fund on this week's top 10 flows list has assets of more than $10 billion―except one.

The iShares MSCI EAFE Value ETF (EFV) is the smallest fund on the list. It had inflows of $522 million during the period, pushing its total assets under management to $4.3 billion.

In addition to large-cap ETFs such as SPY, the iShares Core S&P 500 ETF (IVV), the Vanguard S&P 500 Index Fund (VOO) and the SPDR Dow Jones Industrial Average ETF (DIA)several mid- and small-cap fundswere also in favor this week.

The Vanguard Mid-Cap Index Fund (VO) had inflows of $1.6 billion; the Vanguard Small Cap Value Index Fund (VBR) had inflows of $672 million; and the Vanguard Small-Cap Index Fund (VB) had inflows of $638 million. 

Outflows For LQD, GLD & Sector Funds 
On the other side of the ledger, the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) was the biggest ETF loser of the week, with outflows of $790 million. Like Treasurys, U.S. investment-grade corporate bonds were hammered since the election. LQD last had a year-to-date return of 4.6%, compared with nearly 11% at its 2016 highs.

Another fixed-income loser this week was the iShares 20+ Year Treasury ETF (TLT), with outflows of almost $250 million. Year-to-date, TLT is now down about 3%, compared with a gain of 20% at its highs. That's a perfect illustration of the roller-coaster ride fixed-income ETFs have seen this year. 

At the No. 2 position on the weekly outflows list was the SPDR Gold Trust (GLD). GLD's $687 million worth of outflows is a continuation of the slow bleed the physically backed gold ETF has seen since Trump's victory on Nov. 8. Gold prices dropped to a fresh 10-month low of $1,121 on Friday, pushing the metal's year-to-date gain down to 7%.

Rounding out the 10 ETFs on this week's outflows list were a number of sector and industry funds. The iShares Cohen & Steers REIT ETF (ICF) saw outflows of $405 million; the iShares U.S. Real Estate ETF (IYR) had outflows of $392 million; and the Financial Select Sector SPDR Fund (XLF) garnered outflows of $309 million.

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
SPY SPDR S&P 500 ETF Trust 7,421.69 226,349.41 3.39%
QQQ PowerShares QQQ Trust 2,617.22 41,770.94 6.68%
VO Vanguard Mid-Cap Index Fund 1,583.39 18,041.01 9.62%
IVV iShares Core S&P 500 ETF 1,274.70 91,170.14 1.42%
DIA SPDR Dow Jones Industrial Average ETF Trust 900.17 14,765.99 6.49%
VEA Vanguard FTSE Developed Markets ETF 702.73 39,116.96 1.83%
VBR Vanguard Small Cap Value Index Fund 672.46 10,357.50 6.94%
VB Vanguard Small-Cap Index Fund 638.43 16,556.26 4.01%
VOO Vanguard S&P 500 Index Fund 638.37 57,165.95 1.13%
EFV iShares MSCI EAFE Value ETF 522.49 4,277.91 13.91%

Top 10 Redemptions (All ETFs)

Ticker Name Net Flows ($,mm) AUM ($, mm) AUM % Change
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF -790.43 27,717.59 -2.77%
GLD SPDR Gold Trust -686.97 31,470.61 -2.14%
ICF iShares Cohen & Steers REIT ETF -405.13 3,423.58 -10.58%
IYR iShares U.S. Real Estate ETF -391.78 3,596.69 -9.82%
XLI Industrial Select Sector SPDR Fund -335.80 10,155.58 -3.20%
XLF Financial Select Sector SPDR Fund -309.46 22,450.45 -1.36%
XRT SPDR S&P Retail ETF -287.55 503.01 -36.37%
KRE SPDR S&P Regional Banking ETF -286.55 3,255.89 -8.09%
TLT iShares 20+ Year Treasury Bond ETF -248.57 5,014.37 -4.72%
XLP Consumer Staples Select Sector SPDR Fund -246.68 7,773.12 -3.08%

ETF Weekly Flows By Asset Class

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 22,094.72 1,479,391.90 1.49%
International Equity 3,276.74 509,307.43 0.64%
U.S. Fixed Income 313.64 405,795.27 0.08%
International Fixed Income -155.21 39,681.96 -0.39%
Commodities -834.39 62,387.45 -1.34%
Currency 39.20 3,111.24 1.26%
Leveraged 160.67 23,743.44 0.68%
Inverse 309.12 17,889.92 1.73%
Asset Allocation 109.49 6,576.82 1.66%
Alternatives 79.13 4,093.42 1.93%
Total: 25,393.11 2,551,978.84 1.00%

Top 10 Volume Surprises, Funds >$50 mm AUM

Ticker Name Average Volume
(30 Day)
1 Week Average
Volume
% of Average
DGT SPDR Global Dow ETF 2,666 9,245 346.76%
EIRL iShares MSCI Ireland Capped ETF 52,810 217,877 412.57%
LRGF iShares FactorSelect MSCI USA ETF 165,704 317,626 191.68%
XHS SPDR S&P Health Care Services ETF 32,221 55,855 173.35%
SCIU Global X Scientific Beta US ETF 5,646 9,862 174.66%
OILB   124 327 263.79%
ONEO SPDR Russell 1000 Momentum Focus 2,321 4,658 200.68%
LTPZ PIMCO 15+ Year US TIPS Index ETF 17,961 51,123 284.63%
JKH iShares Morningstar Mid-Cap Growth ETF 3,415 5,265 154.14%
FLRN SPDR Barclays Investment Grade Floating Rate ETF 127,224 219,488 172.52%

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.

 

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