Weekly ETF Inflows See Rare Retreat

September 28, 2018

ETF flows for the week ending Thursday, Sept. 27, registered a rare retreat of new assets from the space, but a lot of that had to do with a change in some sector index funds.

For the week, inflows fell just over $11 billion, bringing the year’s total new asset to $204 billion, led by $10 billion of outflows in equity ETFs, which is related to the sector classification change.

Starting today, revisions to the Global Industry Classification Standard (GICS), an industrywide sector classification upon which dozens of ETFs are based, began to take effect.

These changes, which we've reported on extensively, are the largest such changes to the classification standard ever made. As such, dozens of GICS-based ETFs will require significant rebalancing to accurately reflect their benchmarks' new compositions.

As a result, investors are adjusting allocation in several sector funds, most notably the three-month-old Communication Services Select Sector SPDR Fund (XLC). The fund more than doubled its asset with new inflows of more than $1 billion for the week.

(Also see: Sector Shuffle Not Taxing At All”)

Telecom & Internet Come Together

XLC offers exposure to the communication services sector that was defined by the September 2018 changes to the GICS. The fund includes all members of the former telecom sector (expanded to include internet service providers), as well as media and entertainment companies previously classified in the consumer discretionary or tech sectors. 

Conversely, the Technology Select Sector SPDR Fund (XLK), the tech sector fund that is home to many of internet companies moving to XLC, led outflows with just over $4 billion, or 15% of the fund’s assets, leaving.

In addition, the Consumer Discretionary Select Sector SPDR Fund (XLY) saw outflows of more than $2 billion as the impact of GICS changes its exposure as well.

Drew Voros can be reached at [email protected]

Top 10 Creations (All ETFs)

Ticker Name Net Flows ($,mm) AUM ($, mm) AUM % Change
IWM iShares Russell 2000 ETF 3,295.80 49,631.92 7.11%
QQQ Invesco QQQ Trust 2,023.75 73,170.41 2.84%
XLC Communication Services Select Sector SPDR Fund 1,069.80 1,862.93 134.88%
XLV Health Care Select Sector SPDR Fund 712.79 19,842.28 3.73%
USIG iShares Broad USD Investment Grade Corporate Bond ETF 626.84 2,163.67 40.79%
VEA Vanguard FTSE Developed Markets ETF 611.43 71,942.25 0.86%
SPY SPDR S&P 500 ETF Trust 371.56 279,549.18 0.13%
XLE Energy Select Sector SPDR Fund 367.16 18,387.57 2.04%
FBT First Trust NYSE Arca Biotechnology Index Fund 338.21 2,677.74 14.46%
PDBC Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF 337.75 2,592.31 14.98%

Top 10 Redemptions (All ETFs)

Ticker Name Net Flows ($,mm) AUM ($, mm) AUM % Change
XLK Technology Select Sector SPDR Fund -4,066.05 22,537.20 -15.28%
VB Vanguard Small-Cap ETF -2,620.89 24,871.25 -9.53%
XLY Consumer Discretionary Select Sector SPDR Fund -2,201.43 16,179.93 -11.98%
VOO Vanguard S&P 500 ETF -1,902.44 104,168.95 -1.79%
VBK Vanguard Small-Cap Growth ETF -998.28 8,992.76 -9.99%
HYG iShares iBoxx USD High Yield Corporate Bond ETF -834.70 14,698.64 -5.37%
LQD iShares iBoxx USD Investment Grade Corporate Bond ETF -799.94 33,883.00 -2.31%
XLI Industrial Select Sector SPDR Fund -791.68 12,786.89 -5.83%
VO Vanguard Mid-Cap ETF -630.99 25,199.28 -2.44%
SCHM Schwab U.S. Mid-Cap ETF -626.03 5,450.60 -10.30%

ETF Weekly Flows By Asset Class

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity -9,736.41 2,170,163.88 -0.45%
International Equity -394.66 799,960.96 -0.05%
U.S. Fixed Income -1,722.27 569,202.65 -0.30%
International Fixed Income 543.26 65,260.52 0.83%
Commodities  362.24 59,625.33 0.61%
Currency 11.26 1,099.04 1.02%
Leveraged -445.43 37,502.01 -1.19%
Inverse 323.42 12,926.64 2.50%
Asset Allocation -116.90 9,502.48 -1.23%
Alternatives 118.29 4,887.52 2.42%
Total: -11,057.20 3,730,131.03 -0.30%

Asset Classes (Year-to-Date)

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 95,491.66 2,170,163.88 4.40%
International Equity 35,647.25 799,960.96 4.46%
U.S. Fixed Income 57,715.00 569,202.65 10.14%
International Fixed Income 9,415.91 65,260.52 14.43%
Commodities  -1,349.37 59,625.33 -2.26%
Currency -96.03 1,099.04 -8.74%
Leveraged 3,300.75 37,502.01 8.80%
Inverse 2,603.68 12,926.64 20.14%
Asset Allocation 682.39 9,502.48 7.18%
Alternatives 743.72 4,887.52 15.22%
Total: 204,154.96 3,730,131.03 5.47%

Top 10 Volume Surprises, Funds >$50 mm AUM

Ticker Name Average Volume
(30 Day)
1 Week Average
Volume
% of Average
IG Principal Investment Grade Corporate Active ETF 174 1,201 689.96%
GDVD Principal Active Global Dividend Income ETF 755 4,051 536.32%
MXDU Nationwide Maximum Diversification U.S. Core Equity ETF 3,462 17,089 493.56%
FTXO First Trust Nasdaq Bank ETF 504,386 2,427,823 481.34%
FBT First Trust NYSE Arca Biotechnology Index Fund 151,979 652,493 429.33%
LQDH iShares Interest Rate Hedged Corporate Bond ETF 43,314 145,385 335.65%
RGI Invesco S&P 500 Equal Weight Industrials ETF 11,729 36,889 314.52%
HTRB Hartford Total Return Bond ETF 34 77 223.92%
RWW Oppenheimer S&P Financials Revenue ETF 2,108 5,418 257.06%
AIRR First Trust RBA American Industrial Renaissance ETF 20,932 49,849 238.14%

 

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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