Low Vol ETFs Power Weekly Inflows

November 16, 2018

A sense of worry lingered over financial markets this week as investors grappled with issues related to trade, interest rates and Brexit. But even though the S&P 500 sold off a few percentage points during the period, investors were confident enough in the long-term outlook to add money to ETFs.

In total, a net $5.5 billion of new money entered U.S.-listed ETFs, including $4.1 billion in U.S. equity ETFs and $1.9 billion in international equity ETFs.

Low Cost, Low Vol

The focus was on low cost and low volatility. Cheap funds like the iShares Core S&P 500 ETF (IVV) and the Vanguard Total World Stock ETF (VT) netted assets during the week.

So too did low-vol products, such as the Invesco S&P 500 Low Volatility ETF (SPLV) and the iShares Edge MSCI Min Vol U.S.A. ETF (USMV), both of which made the top 10 inflows list.

Another safety play, the Utilities Select Sector SPDR Fund (XLU), also garnered interest.

On the other hand, sticking out like a sore thumb was the VelocityShares 3X Inverse Natural Gas ETN (DGAZ). The ETN, which allows traders to make bearish, leveraged wagers on natural gas prices, was pummeled this week as natural gas prices soared. DGAZ dropped 56% on Wednesday alone, but despite the free-fall, attracted inflows of $417 million this week.

Corporates Out Of Favor

On the other side of the ledger, fixed-income ETFs fell out of favor this week amid worries about the ability of corporate borrowers to repay their debts should the economy slow next year.

The iShares iBoxx USD High Yield Corporate Bond ETF (HYG), the iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD) and the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) saw some of the largest outflows during the period.

U.S. fixed-income ETFs as a whole registered net outflows of $1.7 billion on the week, while the U.S. 10-year Treasury yield dropped from 3.19% to 3.07%.

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
IVV iShares Core S&P 500 ETF 1,345.16 158,368.55 0.85%
FXH First Trust Health Care AlphaDEX Fund 738.06 2,173.28 33.96%
SPLV Invesco S&P 500 Low Volatility ETF 698.64 8,569.84 8.15%
XLU Utilities Select Sector SPDR Fund 536.41 8,274.44 6.48%
IWM iShares Russell 2000 ETF 477.05 43,995.81 1.08%
VT Vanguard Total World Stock ETF 462.37 11,831.25 3.91%
DGAZ VelocityShares 3X Inverse Natural Gas ETN 417.15 341.62 122.11%
USMV iShares Edge MSCI Min Vol U.S.A. ETF 408.05 17,895.91 2.28%
VEA Vanguard FTSE Developed Markets ETF 395.44 66,898.07 0.59%
VTI Vanguard Total Stock Market ETF 372.60 99,859.92 0.37%

Top 10 Redemptions (All ETFs)

Ticker Name Net Flows ($,mm) AUM ($, mm) AUM % Change
HYG iShares iBoxx USD High Yield Corporate Bond ETF -1,802.08 13,313.20 -13.54%
SPY SPDR S&P 500 ETF Trust -832.01 256,514.56 -0.32%
FXR First Trust Industrials/Producer Durables AlphaDEX Fund -738.67 512.58 -144.11%
QQQ Invesco QQQ Trust -645.99 64,767.16 -1.00%
XLF Financial Select Sector SPDR Fund -631.69 28,621.99 -2.21%
LQD iShares iBoxx USD Investment Grade Corporate Bond ETF -605.27 30,946.98 -1.96%
XLI Industrial Select Sector SPDR Fund -348.27 11,654.99 -2.99%
XBI SPDR S&P BIOTECH ETF -336.01 3,937.62 -8.53%
JNK SPDR Bloomberg Barclays High Yield Bond ETF -328.57 8,004.61 -4.10%
SHV iShares Short Treasury Bond ETF -286.74 15,599.69 -1.84%

ETF Weekly Flows By Asset Class

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 4,112.61 2,019,472.53 0.20%
International Equity 1,888.26 746,600.58 0.25%
U.S. Fixed Income -1,702.44 565,255.27 -0.30%
International Fixed Income 270.78 66,221.85 0.41%
Commodities  186.46 59,677.67 0.31%
Currency -15.59 1,110.99 -1.40%
Leveraged 318.98 35,032.97 0.91%
Inverse 456.39 13,115.57 3.48%
Asset Allocation 14.97 9,011.57 0.17%
Alternatives -55.19 4,796.61 -1.15%
Total: 5,475.23 3,520,295.61 0.16%

Asset Classes (Year-to-Date)

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 103,827.72 2,019,472.53 5.14%
International Equity 46,015.39 746,600.58 6.16%
U.S. Fixed Income 62,540.82 565,255.27 11.06%
International Fixed Income 11,084.52 66,221.85 16.74%
Commodities  -322.80 59,677.67 -0.54%
Currency -55.05 1,110.99 -4.96%
Leveraged 6,950.06 35,032.97 19.84%
Inverse 2,303.12 13,115.57 17.56%
Asset Allocation 700.34 9,011.57 7.77%
Alternatives 278.81 4,796.61 5.81%
Total: 233,322.93 3,520,295.61 6.63%

Top 10 Volume Surprises, Funds >$50 mm AUM

Ticker Name Average Volume
(30 Day)
1 Week Average
Volume
% of Average
IXG iShares Global Financials ETF 135,843 704,292 518.46%
NORW Global X MSCI Norway ETF 204,250 1,114,965 545.88%
PAVE Global X U.S. Infrastructure Development ETF 118,876 562,041 472.79%
XNTK SPDR NYSE Technology ETF 77,912 317,207 407.14%
FXB Invesco CurrencyShares British Pound Sterling Trust 111,471 423,897 380.28%
JPN Xtrackers Japan JPX-Nikkei 400 Equity ETF 272,238 812,416 298.42%
SMB VanEck Vectors AMT-Free Short Municipal Index ETF 58,237 164,228 282.00%
PUI Invesco DWA Utilities Momentum ETF 18,753 49,075 261.69%
HYDW Xtrackers Low Beta High Yield Bond ETF 1,136 2,901 255.34%
MVV ProShares Ultra MidCap400 86,325 214,704 248.72%

 

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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