Yearly ETF Inflows Hit $125B Despite Fed Rate Hike

Investors added money into ETFs for a 19th-straight week.

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Reviewed by: Sumit Roy
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Edited by: Sumit Roy

The first rate hike of the year from the Federal Reserve didn't dissuade investors from buying exchange-traded funds. Inflows into U.S.-listed ETFs continued at a torrid pace, as $19 billion came into the space in the week ending Thursday, March 16, according to FactSet. The year-to-date total for inflows now stands at $124.7 billion.

U.S. equity funds took in the bulk of new money as the S&P 500 hovered near record highs. Inflows into this segment totaled $13.2 billion. 

International equity ETFs also garnered favor, with $3.5 billion worth of weekly inflows. A victory for a mainstream party in the Dutch elections over a populist anti-EU party was a sigh of relief for investors who want to see the status quo maintained in Europe. 

Meanwhile, U.S. fixed-income ETFs saw inflows to the tune of $1.9 billion despite the Fed's rate hike on Wednesday. Even though it was the second rate hike in three months, the Treasury market rallied after the news. The 10-year bond yield fell from around 2.6% to 2.5% week-over-week (bond prices and yields move inversely).

International fixed-income ETFs had much more modest inflows, of $144 million, while commodity ETFs had inflows of $241 million.

Dividend & Small-Cap ETFs See Inflows
The SPDR S&P 500 ETF (SPY) took the top spot on the weekly inflows list, with $2.5 billion of inflows, followed by the Vanguard Dividend Appreciation Index Fund (VIG), with its $1.5 billion of inflows. 

VIG was one of two dividend-focused ETFs to make the top 10. The other was the Vanguard High Dividend Yield Index Fund (VYM), with $673 million worth of inflows. 

A pair of small-cap funds made the cut as well. The Vanguard Small-Cap Index Fund (VB) and the Vanguard Small Cap Value Index Fund (VBR) had creations of $1 billion and $697 million, respectively. 

Other standouts in the top 10 included the iShares 20+ Year Treasury Bond ETF (TLT), the SPDR Oil & Gas Exploration & Production ETF (XOP) and the Utilities Select Sector SPDR Fund (XLU). Each fund had about $600 million worth of inflows for the week.

Outflows From 'JNK' & 'XLE' As Oil Prices Drop
On the outflows side, the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) easily took the top spot, with redemptions of $947 million. Junk bonds hit a bit of a road bump during the past week as the sell-off in oil prices raised worries about energy sector defaults. 

The Energy Select Sector SPDR Fund (XLE) also fell out of favor amid the oil price skid. It had outflows of $259 million in the period. 

Other sector or industry funds to see redemptions were the SPDR S&P Regional Banking ETF (KRE), the iShares U.S. Real Estate ETF (IYR), the iShares U.S. Technology ETF (IYW) and the Consumer Staples Select Sector SPDR Fund (XLP). Outflows from these funds ranged from $120 million to $240 million.

Finally, the iShares MSCI Japan ETF (EWJ) was a notable international fund to see sizable redemptions. Outflows for the week for EWJ totaled $510 million.

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

Top 10 Creations (All ETFs)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
SPYSPDR S&P 500 ETF Trust2,528.29247,146.081.03%
VIGVanguard Dividend Appreciation Index Fund1,525.8525,552.436.35%
VEAVanguard FTSE Developed Markets ETF1,233.4646,839.042.70%
VBVanguard Small-Cap Index Fund1,046.8718,738.765.92%
VBRVanguard Small Cap Value Index Fund696.7711,721.056.32%
IVViShares Core S&P 500 ETF692.11102,092.780.68%
VYMVanguard High Dividend Yield Index Fund673.1418,687.653.74%
TLTiShares 20+ Year Treasury Bond ETF632.046,104.9111.55%
XOPSPDR S&P Oil & Gas Exploration & Production ETF600.052,440.6932.60%
XLUUtilities Select Sector SPDR Fund569.047,187.888.60%

Top 10 Redemptions (All ETFs)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
JNKSPDR Bloomberg Barclays High Yield Bond ETF-946.7211,072.10-7.88%
QQQPowerShares QQQ Trust-577.5546,331.74-1.23%
EWJiShares MSCI Japan ETF-509.6615,810.72-3.12%
XLEEnergy Select Sector SPDR Fund-258.7516,818.49-1.52%
EFViShares MSCI EAFE Value ETF-237.034,734.74-4.77%
KRESPDR S&P Regional Banking ETF-234.524,016.81-5.52%
IYRiShares U.S. Real Estate ETF-225.394,592.80-4.68%
IWNiShares Russell 2000 Value ETF-204.338,799.33-2.27%
IYWiShares U.S. Technology ETF-147.383,309.68-4.26%
XLPConsumer Staples Select Sector SPDR Fund-123.858,930.87-1.37%

ETF Weekly Flows By Asset Class

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity13,179.781,630,692.630.81%
International Equity3,465.99574,933.910.60%
U.S. Fixed Income1,940.88434,886.240.45%
International Fixed Income144.1143,385.740.33%
Commodities241.0661,777.910.39%
Currency-35.232,919.21-1.21%
Leveraged170.6026,854.570.64%
Inverse-16.7817,178.12-0.10%
Asset Allocation-13.416,637.68-0.20%
Alternatives-77.403,825.06-2.02%
Total:18,999.602,803,091.060.68%

Top 10 Volume Surprises, Funds >$50 mm AUM

TickerNameAverage Volume
(30 Day)
1 Week Average
Volume
% of Average
HOLDAdvisorShares Sage Core Reserves ETF6393,086482.73%
RIGSRiverFront Strategic Income Fund58,817192,666327.57%
FNIFirst Trust Chindia ETF34,021107,015314.55%
CATHGlobal X S&P 500 Catholic Values13,21141,878316.98%
HFXIIQ 50 Percent Hedged FTSE International ETF77,974328,627421.46%
IBDBiShares iBonds Mar 2018 Term Corporate ETF9,57624,891259.94%
INKMSPDR SSgA Income Allocation ETF6,58618,094274.71%
FEPFirst Trust Europe AlphaDEX Fund84,778216,014254.80%
FTXOFirst Trust Nasdaq Bank ETF65,247270,952415.27%
GRICohen & Steers Global Realty Majors ETF14,22724,396171.48%

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 is the senior ETF analyst for etf.com, where he's worked for 12 years. Before joining the company, Roy was the managing editor and commodities analyst for Hard Assets Investor. He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing pickleball and snowboarding.