Weekly ETF Inflows See Rare Retreat

Sector index shift triggers rotation and rebalancing in and out of sector ETFs.

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Editor-in-Chief
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Reviewed by: Drew Voros
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Edited by: Drew Voros

ETF flows for the week ending Thursday, Sept. 27, registered a rare retreat of new assets from the space, but a lot of that had to do with a change in some sector index funds.

For the week, inflows fell just over $11 billion, bringing the year’s total new asset to $204 billion, led by $10 billion of outflows in equity ETFs, which is related to the sector classification change.

Starting today, revisions to the Global Industry Classification Standard (GICS), an industrywide sector classification upon which dozens of ETFs are based, began to take effect.

These changes, which we've reported on extensively, are the largest such changes to the classification standard ever made. As such, dozens of GICS-based ETFs will require significant rebalancing to accurately reflect their benchmarks' new compositions.

As a result, investors are adjusting allocation in several sector funds, most notably the three-month-old Communication Services Select Sector SPDR Fund (XLC). The fund more than doubled its asset with new inflows of more than $1 billion for the week.

(Also see: Sector Shuffle Not Taxing At All”)

Telecom & Internet Come Together

XLC offers exposure to the communication services sector that was defined by the September 2018 changes to the GICS. The fund includes all members of the former telecom sector (expanded to include internet service providers), as well as media and entertainment companies previously classified in the consumer discretionary or tech sectors. 

Conversely, the Technology Select Sector SPDR Fund (XLK), the tech sector fund that is home to many of internet companies moving to XLC, led outflows with just over $4 billion, or 15% of the fund’s assets, leaving.

In addition, the Consumer Discretionary Select Sector SPDR Fund (XLY) saw outflows of more than $2 billion as the impact of GICS changes its exposure as well.

Drew Voros can be reached at [email protected]

Top 10 Creations (All ETFs)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
IWMiShares Russell 2000 ETF3,295.8049,631.927.11%
QQQInvesco QQQ Trust2,023.7573,170.412.84%
XLCCommunication Services Select Sector SPDR Fund1,069.801,862.93134.88%
XLVHealth Care Select Sector SPDR Fund712.7919,842.283.73%
USIGiShares Broad USD Investment Grade Corporate Bond ETF626.842,163.6740.79%
VEAVanguard FTSE Developed Markets ETF611.4371,942.250.86%
SPYSPDR S&P 500 ETF Trust371.56279,549.180.13%
XLEEnergy Select Sector SPDR Fund367.1618,387.572.04%
FBTFirst Trust NYSE Arca Biotechnology Index Fund338.212,677.7414.46%
PDBCInvesco Optimum Yield Diversified Commodity Strategy No K-1 ETF337.752,592.3114.98%

Top 10 Redemptions (All ETFs)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
XLKTechnology Select Sector SPDR Fund-4,066.0522,537.20-15.28%
VBVanguard Small-Cap ETF-2,620.8924,871.25-9.53%
XLYConsumer Discretionary Select Sector SPDR Fund-2,201.4316,179.93-11.98%
VOOVanguard S&P 500 ETF-1,902.44104,168.95-1.79%
VBKVanguard Small-Cap Growth ETF-998.288,992.76-9.99%
HYGiShares iBoxx USD High Yield Corporate Bond ETF-834.7014,698.64-5.37%
LQDiShares iBoxx USD Investment Grade Corporate Bond ETF-799.9433,883.00-2.31%
XLIIndustrial Select Sector SPDR Fund-791.6812,786.89-5.83%
VOVanguard Mid-Cap ETF-630.9925,199.28-2.44%
SCHMSchwab U.S. Mid-Cap ETF-626.035,450.60-10.30%

ETF Weekly Flows By Asset Class

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity-9,736.412,170,163.88-0.45%
International Equity-394.66799,960.96-0.05%
U.S. Fixed Income-1,722.27569,202.65-0.30%
International Fixed Income543.2665,260.520.83%
Commodities 362.2459,625.330.61%
Currency11.261,099.041.02%
Leveraged-445.4337,502.01-1.19%
Inverse323.4212,926.642.50%
Asset Allocation-116.909,502.48-1.23%
Alternatives118.294,887.522.42%
Total:-11,057.203,730,131.03-0.30%

Asset Classes (Year-to-Date)

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity95,491.662,170,163.884.40%
International Equity35,647.25799,960.964.46%
U.S. Fixed Income57,715.00569,202.6510.14%
International Fixed Income9,415.9165,260.5214.43%
Commodities -1,349.3759,625.33-2.26%
Currency-96.031,099.04-8.74%
Leveraged3,300.7537,502.018.80%
Inverse2,603.6812,926.6420.14%
Asset Allocation682.399,502.487.18%
Alternatives743.724,887.5215.22%
Total:204,154.963,730,131.035.47%

Top 10 Volume Surprises, Funds >$50 mm AUM

TickerNameAverage Volume
(30 Day)
1 Week Average
Volume
% of Average
IGPrincipal Investment Grade Corporate Active ETF1741,201689.96%
GDVDPrincipal Active Global Dividend Income ETF7554,051536.32%
MXDUNationwide Maximum Diversification U.S. Core Equity ETF3,46217,089493.56%
FTXOFirst Trust Nasdaq Bank ETF504,3862,427,823481.34%
FBTFirst Trust NYSE Arca Biotechnology Index Fund151,979652,493429.33%
LQDHiShares Interest Rate Hedged Corporate Bond ETF43,314145,385335.65%
RGIInvesco S&P 500 Equal Weight Industrials ETF11,72936,889314.52%
HTRBHartford Total Return Bond ETF3477223.92%
RWWOppenheimer S&P Financials Revenue ETF2,1085,418257.06%
AIRRFirst Trust RBA American Industrial Renaissance ETF20,93249,849238.14%

 

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.

 

Drew Voros has nearly 30 years' experience in financial journalism. He was a longtime business editor for the Oakland Tribune and sister papers of the Bay Area News Group, and finance writer for the Hollywood trade publication Variety. Voros' past roles have also included editor-in-chief at etf.com and ETF Report.