Investors Add To ETFs Despite Inverted Yield Curve

August 16, 2019

ETFs clawed back some of last week’s outflows this week, even as stress grew in financial markets following a rare 10-year/2-year yield curve inversion. Investors put $7 billion to work in ETFs during the week ending Thursday, Aug. 15, using the pullback in U.S. stocks to buy.

U.S. equity ETFs took in almost $5.5 billion during the period. The S&P 500 sagged as low as 2,825 on Thursday, matching its low from last week—down 6.7% from its all-time high. Weak economic data abroad and an inverted yield curve are fueling recession fears, but so far, the sell-off in U.S. stocks has been relatively modest.

The same can’t be said for international stocks. They were hammered this week following the release of exceptionally weak economic data from China and Germany. Meanwhile, a surprise election victory for a left-leaning presidential candidate in Argentina weighed on emerging markets and sent the Argentine stock market plunging by nearly 40% in a single day.

Investors pulled $3.8 billion out of international equity ETFs this week, including $1.2 billion from the iShares MSCI Emerging Markets ETF (EEM), $628 million from the iShares Core MSCI Emerging Markets ETF (IEMG) and $354 million from the iShares MSCI Europe Financials ETF (EUFN).

Relentless Rally In Bonds

Meanwhile, this week’s growing recession concerns had a positive effect on bonds. U.S. fixed income ETFs took in $4.4 billion during the period as the 30-year Treasury bond yield tumbled to a record-low 1.91% on Thursday. It was 2.6% a mere two weeks ago.

At the same time, the U.S. 10-year Treasury yield fell as low as 1.51%, briefly dipping below the yield of the U.S. two-year, in what some saw as a sign of an impending recession.

U.S. fixed income ETFs have gathered far and away the most assets of all asset classes this year—$76 billion. Year-to-date net inflows for all U.S.-listed ETFs now stand at $136.8 billion, less than the $156.1 billion at this 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
QQQ Invesco QQQ Trust 2,299.39 71,664.47 3.21%
SPY SPDR S&P 500 ETF Trust 1,997.20 255,151.65 0.78%
IWM iShares Russell 2000 ETF 1,047.86 39,749.39 2.64%
HYG iShares iBoxx USD High Yield Corporate Bond ETF 672.59 17,345.06 3.88%
IEF iShares 7-10 Year Treasury Bond ETF 666.29 18,016.12 3.70%
SPLV Invesco S&P 500 Low Volatility ETF 609.97 12,411.34 4.91%
XLI Industrial Select Sector SPDR Fund 577.09 9,931.56 5.81%
USMV iShares Edge MSCI Min Vol U.S.A. ETF 509.21 31,608.35 1.61%
VOO Vanguard S&P 500 ETF 482.10 118,507.33 0.41%
ITOT iShares Core S&P Total U.S. Stock Market ETF 479.45 21,385.23 2.24%

 

Top 10 Redemptions (All ETFs)

Ticker Name Net Flows ($,mm) AUM ($, mm) AUM % Change
XLF Financial Select Sector SPDR Fund -1,267.15 20,360.19 -6.22%
EEM iShares MSCI Emerging Markets ETF -1,190.17 24,914.08 -4.78%
IJH iShares Core S&P Mid-Cap ETF -749.57 47,197.65 -1.59%
XLK Technology Select Sector SPDR Fund -668.89 20,818.48 -3.21%
IEMG iShares Core MSCI Emerging Markets ETF -628.20 51,961.45 -1.21%
XLP Consumer Staples Select Sector SPDR Fund -382.01 12,780.70 -2.99%
XLE Energy Select Sector SPDR Fund -363.78 9,986.72 -3.64%
EUFN iShares MSCI Europe Financials ETF -354.47 605.78 -58.51%
IXC iShares Global Energy ETF -320.79 845.70 -37.93%
VXF Vanguard Extended Market ETF -317.28 6,988.83 -4.54%

 

ETF Weekly Flows By Asset Class

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 5,482.93 2,193,521.42 0.25%
International Equity -3,770.03 775,473.12 -0.49%
U.S. Fixed Income 4,414.91 704,145.89 0.63%
International Fixed Income 100.39 79,958.17 0.13%
Commodities  547.23 76,442.68 0.72%
Currency 20.26 1,448.96 1.40%
Leveraged 27.06 34,803.23 0.08%
Inverse 331.55 12,758.92 2.60%
Asset Allocation 52.87 9,725.65 0.54%
Alternatives -208.00 4,564.23 -4.56%
Total: 6,999.17 3,892,842.28 0.18%

 

Asset Classes (Year-to-Date)

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 48,270.45 2,193,521.42 2.20%
International Equity 231.49 775,473.12 0.03%
U.S. Fixed Income 76,006.44 704,145.89 10.79%
International Fixed Income 9,902.62 79,958.17 12.38%
Commodities  3,695.70 76,442.68 4.83%
Currency -340.22 1,448.96 -23.48%
Leveraged -5,416.15 34,803.23 -15.56%
Inverse 3,976.34 12,758.92 31.17%
Asset Allocation 51.18 9,725.65 0.53%
Alternatives 465.19 4,564.23 10.19%
Total: 136,843.04 3,892,842.28 3.52%

 

Top 10 YTD Performers

Ticker Name YTD Performance Weekly Performance AUM ($, mm)
TAN Invesco Solar ETF 56.82% -5.58% 433.31
JJN iPath Series B Bloomberg Nickel Subindex Total Return ETN 48.81% 1.65% 8.48
PTF Invesco DWA Technology Momentum ETF 43.99% -3.91% 250.08
GOAU U.S. Global GO Gold and Precious Metal Miners ETF 43.73% -1.73% 24.29
RING iShares MSCI Global Gold Miners ETF 41.23% -2.74% 267.74
SGDM Sprott Gold Miners ETF 40.16% -2.70% 189.88
SGDJ Sprott Junior Gold Miners ETF 35.77% -5.22% 68.38
PBW Invesco WilderHill Clean Energy ETF 34.90% -4.84% 174.07
GDX VanEck Vectors Gold Miners ETF 34.71% -3.24% 11,511.92
GOEX Global X Gold Explorers ETF 34.59% -4.91% 47.60

 

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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