Investors Plow Into Treasury ETFs This Week

June 07, 2019

Treasuries, Treasuries and more Treasuries. That’s what ETF investors were interested in this week as bond prices surged and interest rates tumbled. All throughout the week, expectations grew that the Federal Reserve will cut interest rates later this year, as economic data weakens and the U.S. fights trade wars on multiple fronts.

The benchmark U.S. 10-year Treasury yield plunged to as low as 2.05%. The yield accelerated to the downside after payroll processor ADP reported that private employers only added 27,000 jobs in May. The official government jobs report on Friday wasn’t as weak, but also showed a marked deceleration in job growth, with nonfarm payrolls increasing by only 75,000.

Futures markets now expect the Fed to cut rates as early as the July meeting, and then again in September.

Hefty Treasury ETF Inflows

With rate cut expectations picking up steam, investors plowed $10.4 billion into U.S. fixed income ETFs, including billions into the iShares 7-10 Year Treasury Bond ETF (IEF), the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL).

Seven of the 10 ETFs on the top inflows list were bond funds, most of them focused on Treasuries.

Safe haven gold also caught a bid; the SPDR Gold Trust (GLD) garnered weekly inflows of $694 million.

Net Outflows For Equity ETFs

On the flip side, U.S. equity ETFs and international equity ETFs had modest outflows this week. The S&P 500 fell as much as 7.6% below its all-time high before snapping back vigorously on Fed rate cut hopes.

The Vanguard S&P 500 ETF (VOO) and the iShares Core S&P 500 ETF (IVV) were the biggest equity ETF flows winners. On the other hand, the Invesco QQQ Trust (QQQ), the SPDR S&P 500 ETF Trust (SPY) and the iShares MSCI Japan ETF (EWJ) topped the outflows list.

Year-to-date inflows for all U.S.-listed ETFs now stand at $75.2 billion, compared with $119.7 billion at this same time last year.

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
IEF iShares 7-10 Year Treasury Bond ETF 1,844.71 16,169.06 11.41%
BIL SPDR Bloomberg Barclays 1-3 Month T-Bill ETF 1,313.15 9,236.19 14.22%
ITE SPDR Bloomberg Barclays Intermediate Term Treasury ETF 933.45 1,662.54 56.15%
SHV iShares Short Treasury Bond ETF 916.70 21,236.80 4.32%
SHY iShares 1-3 Year Treasury Bond ETF 768.81 20,853.33 3.69%
VOO Vanguard S&P 500 ETF 763.97 109,805.45 0.70%
GLD SPDR Gold Trust 693.95 32,506.19 2.13%
AGG iShares Core U.S. Aggregate Bond ETF 650.07 62,635.31 1.04%
SPTL SPDR Portfolio Long Term Treasury ETF 606.33 2,525.62 24.01%
IVV iShares Core S&P 500 ETF 604.32 174,664.53 0.35%

 

Top 10 Redemptions (All ETFs)

Ticker Name Net Flows ($,mm) AUM ($, mm) AUM % Change
QQQ Invesco QQQ Trust -735.93 67,809.84 -1.09%
SPY SPDR S&P 500 ETF Trust -678.22 255,862.67 -0.27%
EWJ iShares MSCI Japan ETF -579.00 12,308.88 -4.70%
BKLN Invesco Senior Loan ETF -557.25 4,109.48 -13.56%
XLF Financial Select Sector SPDR Fund -474.49 23,484.67 -2.02%
MDY SPDR S&P Midcap 400 ETF Trust -423.87 18,700.95 -2.27%
JNK SPDR Bloomberg Barclays High Yield Bond ETF -380.77 7,855.52 -4.85%
XLK Technology Select Sector SPDR Fund -359.71 20,241.25 -1.78%
EZU iShares MSCI Eurozone ETF -345.32 6,044.32 -5.71%
VTI Vanguard Total Stock Market ETF -343.43 111,230.84 -0.31%

 

ETF Weekly Flows By Asset Class

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity -744.67 2,148,428.78 -0.03%
International Equity -2,302.19 801,791.54 -0.29%
U.S. Fixed Income 10,446.68 663,892.59 1.57%
International Fixed Income 548.54 74,332.50 0.74%
Commodities  814.04 62,920.14 1.29%
Currency 22.15 1,533.08 1.45%
Leveraged -202.30 35,168.97 -0.58%
Inverse 93.20 12,462.79 0.75%
Asset Allocation -110.50 9,343.00 -1.18%
Alternatives 18.85 4,572.86 0.41%
Total: 8,583.82 3,814,446.26 0.23%

 

Asset Classes (Year-to-Date)

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 13,734.21 2,148,428.78 0.64%
International Equity 6,022.14 801,791.54 0.75%
U.S. Fixed Income 50,719.45 663,892.59 7.64%
International Fixed Income 6,202.90 74,332.50 8.34%
Commodities  -2,101.30 62,920.14 -3.34%
Currency -258.50 1,533.08 -16.86%
Leveraged -1,977.74 35,168.97 -5.62%
Inverse 2,841.48 12,462.79 22.80%
Asset Allocation -603.80 9,343.00 -6.46%
Alternatives 588.87 4,572.86 12.88%
Total: 75,167.70 3,814,446.26 1.97%

 

Top 10 Volume Surprises, Funds >$50 mm AUM

Ticker Name Average Volume
(30 Day)
1 Week Average
Volume
% of Average
DBEM Xtrackers MSCI Emerging Markets Hedged Equity ETF 28,118 122,329 435.06%
HEEM iShares Currency Hedged MSCI Emerging Markets ETF 114,143 475,474 416.56%
XTL SPDR S&P Telecom ETF 19,349 84,463 436.52%
IQIN IQ 500 International ETF 100,403 289,909 288.75%
SPTS SPDR Portfolio Short Term Treasury ETF 579,053 1,854,220 320.22%
YLD Principal Active Income ETF 2,387 6,115 256.22%
HAP VanEck Vectors Natural Resources ETF 6,599 17,771 269.31%
DALI First Trust Dorsey Wright DALI 1 ETF 13,233 25,236 190.71%
SHV iShares Short Treasury Bond ETF 1,953,799 5,879,113 300.91%
SPIB SPDR Portfolio Intermediate Term Corporate Bond ETF 1,276,349 3,679,869 288.31%

 

 

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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