'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.

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Reviewed by: Sumit Roy
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Edited by: Sumit Roy

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)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
VOOVanguard S&P 500 ETF594.3479,106.280.76%
EWJiShares MSCI Japan ETF539.2218,345.383.03%
IVViShares Core S&P 500 ETF520.34134,770.920.39%
VEAVanguard FTSE Developed Markets ETF421.3166,307.110.64%
EZUiShares MSCI Eurozone ETF385.4514,809.352.67%
LQDiShares iBoxx $ Investment Grade Corporate Bond ETF374.9839,025.280.97%
QQQPowerShares QQQ Trust330.1257,611.720.58%
DBCPowerShares DB Commodity Index Tracking Fund273.792,402.1012.86%
VGKVanguard FTSE Europe ETF246.0418,006.921.39%
VTVVanguard Value ETF224.7134,742.760.65%

Top 10 Redemptions (All ETFs)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
SPYSPDR S&P 500 ETF Trust-6,144.04248,496.57-2.41%
IWMiShares Russell 2000 ETF-877.7041,911.42-2.05%
TLTiShares 20+ Year Treasury Bond ETF-702.637,328.93-8.75%
HYGiShares iBoxx $ High Yield Corporate Bond ETF-560.8918,718.33-2.91%
UGAZVelocityShares 3X Long Natural Gas ETN-343.48847.56-28.84%
JNKSPDR Bloomberg Barclays High Yield Bond ETF-332.2412,590.24-2.57%
FXUFirst Trust Utilities AlphaDEX Fund-261.51943.81-21.70%
USOUnited States Oil Fund LP-239.432,116.65-10.16%
XLFFinancial Select Sector SPDR Fund-214.8628,670.21-0.74%
XLEEnergy Select Sector SPDR Fund-193.3617,019.36-1.12%

ETF Weekly Flows By Asset Class

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity-994.151,817,025.37-0.05%
International Equity3,701.50774,170.180.48%
U.S. Fixed Income773.96516,284.940.15%
International Fixed Income-25.5955,989.86-0.05%
Commodities -135.6866,276.28-0.20%
Currency-25.791,325.54-1.95%
Leveraged-357.1831,677.12-1.13%
Inverse319.7517,155.571.86%
Asset Allocation24.158,695.500.28%
Alternatives-15.534,178.22-0.37%
Total:3,265.433,292,778.570.10%

Top 10 Volume Surprises, Funds >$50 mm AUM

TickerNameAverage Volume
(30 Day)
1 Week Average
Volume
% of Average
GDVDPrincipal Active Global Dividend Income ETF8124,703579.08%
FXLFirst Trust Technology AlphaDEX Fund190,947874,263457.86%
FXUFirst Trust Utilities AlphaDEX Fund619,2492,161,561349.06%
JPMEJPMorgan Diversified Return U.S. Mid Cap Equity ETF18,01147,425263.30%
MLPZETRACS 2xMonthly Leveraged S&P MLP Index ETN Series B1,2035,978497.09%
JPGBJPMorgan Global Bond Opportunities ETF3,39110,539310.83%
DGREWisdomTree Emerging Markets Quality Dividend Growth Fund24,48375,965310.27%
IBDCiShares iBonds Mar 2020 Term Corporate ETF16,28035,105215.63%
MUNIPIMCO Intermediate Municipal Bond Active ETF15,47937,779244.07%
DGTSPDR Global Dow ETF2,0154,609228.74%

 

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.

 

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.