ETF Demand Up Despite Market Chaos

March 13, 2020

You wouldn’t be able to tell that the stock market just had one of its worst days and one of its worst weeks in history based on ETF flows. The S&P 500 collapsed 9.5% on Thursday—its largest decline since 1987 and the fifth-largest single-session decline ever. The index fell a whopping 16.5% in the five sessions through Thursday, and yet, remarkably, U.S.-listed ETFs registered net inflows during that period.

Indeed, $2.9 billion flowed into ETFs during the week, pushing year-to-date inflows up to $89.8 billion, ahead of last year’s $54.7 billion pace at this time.

That suggests that rather than panic, ETF investors are holding firm and, in some cases, adding to their positions amid the market volatility.

US Equities Lead Inflows

Importantly, most of this week’s inflows went into U.S. equity ETFs, where the damage has been severe. The S&P 500 fell as much as 27% below its all-time highs on Thursday. Yet, U.S. equity ETFs had net inflows of $8.5 billion during the week. Low-cost index funds like the Vanguard S&P 500 ETF (VOO), the iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF Trust (SPY) topped the weekly inflows list.

On the other hand, investors shunned international equity ETFs; about $4.6 billion flowed out of the space. Sentiment on international stocks soured as coronavirus cases in Europe exploded and the Italian economy shut down.

Investors also used the record rally in Treasuries to take money off the table. The 10-year Treasury bond yield dipped to an all-time low of 0.31% on Monday, sending Treasury prices to the stratosphere (bond prices and yields move inversely). But those yields nearly tripled off the lows as investors reasoned that the rally may have extended too far and too fast.

U.S. fixed income ETFs had net outflows of $4.6 billion during the week. The iShares Core U.S. Aggregate Bond ETF (AGG) was the biggest flows loser in the space. 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) also had outflows as credit spreads widened significantly and investors fretted about overleveraged companies.

The Federal Reserve meets next week and is expected to cut rates dramatically.

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
VOO Vanguard S&P 500 ETF 2,583.11 124,690.74 2.07%
SHY iShares 1-3 Year Treasury Bond ETF 2,451.79 21,015.96 11.67%
BIL SPDR Bloomberg Barclays 1-3 Month T-Bill ETF 1,684.75 11,779.74 14.30%
IVV iShares Core S&P 500 ETF 1,610.29 180,571.18 0.89%
SPY SPDR S&P 500 ETF Trust 1,601.69 247,007.86 0.65%
VTI Vanguard Total Stock Market ETF 1,420.58 122,487.87 1.16%
SPTS SPDR Portfolio Short Term Treasury ETF 1,275.40 3,559.97 35.83%
SHV iShares Short Treasury Bond ETF 1,186.65 21,651.86 5.48%
XLE Energy Select Sector SPDR Fund 1,125.48 7,711.41 14.60%
IEI iShares 3-7 Year Treasury Bond ETF 806.07 10,974.20 7.35%

 

Top 10 Redemptions (All ETFs)

Ticker Name Net Flows ($,mm) AUM ($, mm) AUM % Change
XLF Financial Select Sector SPDR Fund -2,139.82 14,872.31 -14.39%
AGG iShares Core U.S. Aggregate Bond ETF -1,737.70 74,784.81 -2.32%
QQQ Invesco QQQ Trust -1,452.82 80,049.51 -1.81%
HYG iShares iBoxx USD High Yield Corporate Bond ETF -1,249.49 14,173.26 -8.82%
LQD iShares iBoxx USD Investment Grade Corporate Bond ETF -1,207.62 31,159.16 -3.88%
JNK SPDR Bloomberg Barclays High Yield Bond ETF -900.24 6,513.56 -13.82%
IEF iShares 7-10 Year Treasury Bond ETF -883.36 21,471.23 -4.11%
EMB iShares JP Morgan USD Emerging Markets Bond ETF -882.16 14,250.55 -6.19%
SPTI SPDR Portfolio Intermediate Term Treasury ETF -748.34 1,337.71 -55.94%
TIP iShares TIPS Bond ETF -632.88 21,327.34 -2.97%

 

ETF Weekly Flows By Asset Class

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 8,469.57 2,140,545.84 0.40%
International Equity -3,090.46 744,454.67 -0.42%
U.S. Fixed Income -4,618.99 802,615.07 -0.58%
International Fixed Income -1,658.95 92,045.51 -1.80%
Commodities ETFs 671.52 90,956.19 0.74%
Currency 47.59 1,545.17 3.08%
Leveraged 3,261.98 34,057.66 9.58%
Inverse 137.69 14,352.89 0.96%
Asset Allocation 24.94 9,318.90 0.27%
Alternatives -337.90 5,138.56 -6.58%
Total: 2,906.99 3,935,030.46 0.07%

 

Asset Classes (Year-to-Date)

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 31,792.62 2,140,545.84 1.49%
International Equity 7,676.67 744,454.67 1.03%
U.S. Fixed Income 34,653.19 802,615.07 4.32%
International Fixed Income 3,318.94 92,045.51 3.61%
Commodities ETFs 5,952.40 90,956.19 6.54%
Currency 202.32 1,545.17 13.09%
Leveraged 6,324.96 34,057.66 18.57%
Inverse 316.98 14,352.89 2.21%
Asset Allocation 174.55 9,318.90 1.87%
Alternatives -622.96 5,138.56 -12.12%
Total: 89,789.66 3,935,030.46 2.28%

 

Top 10 Volume Surprises, Funds >$50 mm AUM

Ticker Name Average Volume
(30 Day)
1 Week Average
Volume
% of Average
HEWU iShares Currency Hedged MSCI United Kingdom ETF 15,391 79,058 513.67%
IGHG ProShares Investment Grade-Interest Rate Hedged ETF 54,314 246,246 453.37%
XMPT VanEck Vectors CEF Municipal Income ETF 70,567 255,449 362.00%
HUSV First Trust Horizon Managed Volatility Domestic ETF 120,989 483,137 399.32%
NRGZ MicroSectors U.S. Big Oil Index -2X Inverse Leveraged ETN 293 1,197 408.50%
CVY Invesco Zacks Multi-Asset Income ETF 47,586 162,189 340.83%
DJD Invesco Dow Jones Industrial Average Dividend ETF 51,515 173,865 337.51%
FLEE Franklin FTSE Europe ETF 55,237 125,425 227.07%
FXH First Trust Health Care AlphaDEX Fund 136,240 450,462 330.64%
FDRR Fidelity Dividend ETF for Rising Rates 97,663 279,072 285.75%

 

Top 10 Weekly Performers, Excluding Leverage/Inverse Funds and <1,000 Shares Traded

Ticker Name Weekly Performance Weekly Volume AUM ($, mm)
EVIX VelocityShares 1X Long VSTOXX Futures ETN 32.48% 215,193 3.74
VXX iPath Series B S&P 500 VIX Short Term Futures ETN 29.64% 293,428,150 1,189.15
VIXY ProShares VIX Short-Term Futures ETF 29.14% 35,594,649 294.06
VIIX VelocityShares Daily Long VIX Short-Term ETN 28.99% 1,272,991 48.33
XVZ iPath S&P 500 Dynamic VIX ETN 25.33% 124,310 8.46
VXZ iPath Series B S&P 500 VIX Mid-Term Futures ETN 15.73% 1,558,291 32.48
VIXM ProShares VIX Mid-Term Futures ETF 15.03% 861,726 38.96
UNG United States Natural Gas Fund LP 9.16% 28,608,926 405.66
GAZ iPath Series B Bloomberg Natural Gas Subindex Total Return ETN 9.09% 12,761 2.75
UNL United States 12 Month Natural Gas Fund LP 7.66% 58,589 3.11

 

Top 10 YTD Performers

Ticker Name YTD Performance Weekly Performance AUM ($, mm)
EVIX VelocityShares 1X Long VSTOXX Futures ETN 218.16% 32.48% 3.74
VIIX VelocityShares Daily Long VIX Short-Term ETN 213.94% 28.99% 48.33
VIXY ProShares VIX Short-Term Futures ETF 213.44% 29.14% 294.06
VXX iPath Series B S&P 500 VIX Short Term Futures ETN 213.23% 29.64% 1,189.15
XVZ iPath S&P 500 Dynamic VIX ETN 83.65% 25.33% 8.46
VIXM ProShares VIX Mid-Term Futures ETF 63.41% 15.03% 38.96
VXZ iPath Series B S&P 500 VIX Mid-Term Futures ETN 63.39% 15.73% 32.48
TAIL Cambria Tail Risk ETF 26.88% 6.44% 106.74
MOM AGFiQ U.S. Market Neutral Momentum Fund 24.10% 3.81% 1.40
ZROZ PIMCO 25+ Year Zero Coupon US Treasury Index ETF 23.96% -6.40% 456.22

 

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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