Surging Rates Don't Deter ETF Investors

October 05, 2018

ETF inflows continued at a brisk pace during the first week of October. On net, $5.7 billion entered U.S.-listed ETFs during the week ending Thursday, Oct. 4, according to FactSet. Year-to-date inflows now stand at just shy of $210 billion.

Unlike previous weeks, when U.S. equity ETFs took in the lion’s share of new money, inflows were more evenly split this time around. U.S. equity ETFs picked up a solid $2.3 billion, but international equity ETFs also had respectable inflows of $2 billion.

Even U.S. and international fixed-income ETFs registered a combined $1.2 billion of inflows despite surging interest rates. The benchmark 10-year Treasury yield hit a seven-year high of 3.25% this week thanks to strong economic data.

Bargain Buying In Small Caps & Junks Bonds

Taking the No. 1 spot on the daily inflows list was the iShares Russell 2000 ETF (IWM), with creations of $1.4 billion. Small-caps notably underperformed their large-cap counterparts this week, which may have prompted bargain buyers to pick up shares of IWM.

IWM is currently up 7.4% year-to-date, compared with 9.4% for competing S&P 500 funds.

Similarly, the iShares iBoxx USD High Yield Corporate Bond ETF (HYG) sold off as interest rates hit multiyear highs this week; nevertheless, investors poured $1.3 billion into the fund.

On the other hand, the Invesco QQQ Trust (QQQ) and the iShares 20+ Year Treasury Bond ETF (TLT) weren’t so fortunate. Investors soured on both the tech-heavy equity ETF and the long-term Treasury bond ETF, pulling about $1.6 billion from each of them.

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
IWM iShares Russell 2000 ETF 1,421.66 50,494.46 2.90%
HYG iShares iBoxx USD High Yield Corporate Bond ETF 1,325.21 16,019.79 9.02%
DIA SPDR Dow Jones Industrial Average ETF Trust 839.13 23,251.16 3.74%
FBT First Trust NYSE Arca Biotechnology Index Fund 793.21 3,449.67 29.86%
IVV iShares Core S&P 500 ETF 764.16 166,551.52 0.46%
IEFA iShares Core MSCI EAFE ETF 667.28 59,495.81 1.13%
VEA Vanguard FTSE Developed Markets ETF 602.98 71,373.30 0.85%
XLC Communication Services Select Sector SPDR Fund 587.22 2,462.48 31.31%
MTUM iShares Edge MSCI U.S.A. Momentum Factor ETF 512.17 11,035.12 4.87%
XLI Industrial Select Sector SPDR Fund 431.31 13,430.94 3.32%

Top 10 Redemptions (All ETFs)

Ticker Name Net Flows ($,mm) AUM ($, mm) AUM % Change
QQQ Invesco QQQ Trust -1,673.44 72,224.95 -2.26%
TLT iShares 20+ Year Treasury Bond ETF -1,598.27 7,944.25 -16.75%
FTXO First Trust Nasdaq Bank ETF -828.58 366.14 -69.35%
IYR iShares U.S. Real Estate ETF -690.36 3,781.98 -15.44%
XLY Consumer Discretionary Select Sector SPDR Fund -541.05 15,367.77 -3.40%
VO Vanguard Mid-Cap ETF -504.00 24,512.03 -2.01%
TIP iShares TIPS Bond ETF -452.41 23,265.62 -1.91%
XLV Health Care Select Sector SPDR Fund -431.38 19,611.35 -2.15%
GLD SPDR Gold Trust -408.07 28,245.26 -1.42%
IEF iShares 7-10 Year Treasury Bond ETF -332.62 8,686.07 -3.69%

ETF Weekly Flows By Asset Class

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 2,331.41 2,179,625.39 0.11%
International Equity 2,032.42 792,215.37 0.26%
U.S. Fixed Income 742.77 566,885.83 0.13%
International Fixed Income 477.94 65,619.63 0.73%
Commodities  -219.21 60,360.11 -0.36%
Currency -0.00 1,089.12 -0.00%
Leveraged 123.65 38,222.59 0.32%
Inverse 273.14 13,079.65 2.09%
Asset Allocation -15.52 9,471.65 -0.16%
Alternatives -50.26 4,780.83 -1.05%
Total: 5,696.35 3,731,350.17 0.15%

Asset Classes (Year-to-Date)

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 97,811.58 2,179,625.39 4.49%
International Equity 37,724.05 792,215.37 4.76%
U.S. Fixed Income 58,457.77 566,885.83 10.31%
International Fixed Income 9,893.85 65,619.63 15.08%
Commodities  -1,568.58 60,360.11 -2.60%
Currency -92.76 1,089.12 -8.52%
Leveraged 3,396.22 38,222.59 8.89%
Inverse 2,883.32 13,079.65 22.04%
Asset Allocation 666.87 9,471.65 7.04%
Alternatives 693.46 4,780.83 14.51%
Total: 209,865.79 3,731,350.17 5.62%

Top 10 Volume Surprises, Funds >$50 mm AUM

Ticker Name Average Volume
(30 Day)
1 Week Average
Volume
% of Average
QVAL Alpha Architect U.S. Quantitative Value ETF 11,312 53,619 474.02%
IMTB iShares Core 5-10 Year USD Bond ETF 13,596 60,444 444.57%
WOOD iShares Global Timber & Forestry ETF 31,415 122,302 389.30%
AGZ iShares Agency Bond ETF 16,386 53,627 327.27%
JPMF JPMorgan Managed Futures Strategy ETF 1,168 3,462 296.28%
DVP Deep Value ETF 16,606 46,637 280.84%
FALN iShares Fallen Angels USD Bond ETF 17,189 45,720 265.99%
DVYE iShares Emerging Markets Dividend ETF 81,103 213,245 262.93%
PXLV Invesco Russell Top 200 Pure Value ETF 17,050 41,862 245.53%
HTRB Hartford Total Return Bond ETF 242 561 231.89%

 

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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