'SPY' & Junk Bond ETFs Drag Down Weekly Flows

November 10, 2017

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
% 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.


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