Weekly ETF Inflows See Rare Retreat

Editor-in-Chief

Sep 28, 2018

Reviewed by: Drew Voros

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)

Ticker	Name	Net Flows ($,mm)	AUM ($, mm)	AUM % Change
IWM	iShares Russell 2000 ETF	3,295.80	49,631.92	7.11%
QQQ	Invesco QQQ Trust	2,023.75	73,170.41	2.84%
XLC	Communication Services Select Sector SPDR Fund	1,069.80	1,862.93	134.88%
XLV	Health Care Select Sector SPDR Fund	712.79	19,842.28	3.73%
USIG	iShares Broad USD Investment Grade Corporate Bond ETF	626.84	2,163.67	40.79%
VEA	Vanguard FTSE Developed Markets ETF	611.43	71,942.25	0.86%
SPY	SPDR S&P 500 ETF Trust	371.56	279,549.18	0.13%
XLE	Energy Select Sector SPDR Fund	367.16	18,387.57	2.04%
FBT	First Trust NYSE Arca Biotechnology Index Fund	338.21	2,677.74	14.46%
PDBC	Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF	337.75	2,592.31	14.98%

Top 10 Redemptions (All ETFs)

Ticker	Name	Net Flows ($,mm)	AUM ($, mm)	AUM % Change
XLK	Technology Select Sector SPDR Fund	-4,066.05	22,537.20	-15.28%
VB	Vanguard Small-Cap ETF	-2,620.89	24,871.25	-9.53%
XLY	Consumer Discretionary Select Sector SPDR Fund	-2,201.43	16,179.93	-11.98%
VOO	Vanguard S&P 500 ETF	-1,902.44	104,168.95	-1.79%
VBK	Vanguard Small-Cap Growth ETF	-998.28	8,992.76	-9.99%
HYG	iShares iBoxx USD High Yield Corporate Bond ETF	-834.70	14,698.64	-5.37%
LQD	iShares iBoxx USD Investment Grade Corporate Bond ETF	-799.94	33,883.00	-2.31%
XLI	Industrial Select Sector SPDR Fund	-791.68	12,786.89	-5.83%
VO	Vanguard Mid-Cap ETF	-630.99	25,199.28	-2.44%
SCHM	Schwab U.S. Mid-Cap ETF	-626.03	5,450.60	-10.30%

ETF Weekly Flows By Asset Class

	Net Flows ($, mm)	AUM ($, mm)	% of AUM
U.S. Equity	-9,736.41	2,170,163.88	-0.45%
International Equity	-394.66	799,960.96	-0.05%
U.S. Fixed Income	-1,722.27	569,202.65	-0.30%
International Fixed Income	543.26	65,260.52	0.83%
Commodities	362.24	59,625.33	0.61%
Currency	11.26	1,099.04	1.02%
Leveraged	-445.43	37,502.01	-1.19%
Inverse	323.42	12,926.64	2.50%
Asset Allocation	-116.90	9,502.48	-1.23%
Alternatives	118.29	4,887.52	2.42%
Total:	-11,057.20	3,730,131.03	-0.30%

Asset Classes (Year-to-Date)

	Net Flows ($, mm)	AUM ($, mm)	% of AUM
U.S. Equity	95,491.66	2,170,163.88	4.40%
International Equity	35,647.25	799,960.96	4.46%
U.S. Fixed Income	57,715.00	569,202.65	10.14%
International Fixed Income	9,415.91	65,260.52	14.43%
Commodities	-1,349.37	59,625.33	-2.26%
Currency	-96.03	1,099.04	-8.74%
Leveraged	3,300.75	37,502.01	8.80%
Inverse	2,603.68	12,926.64	20.14%
Asset Allocation	682.39	9,502.48	7.18%
Alternatives	743.72	4,887.52	15.22%
Total:	204,154.96	3,730,131.03	5.47%

Top 10 Volume Surprises, Funds >$50 mm AUM

Ticker	Name	Average Volume (30 Day)	1 Week Average Volume	% of Average
IG	Principal Investment Grade Corporate Active ETF	174	1,201	689.96%
GDVD	Principal Active Global Dividend Income ETF	755	4,051	536.32%
MXDU	Nationwide Maximum Diversification U.S. Core Equity ETF	3,462	17,089	493.56%
FTXO	First Trust Nasdaq Bank ETF	504,386	2,427,823	481.34%
FBT	First Trust NYSE Arca Biotechnology Index Fund	151,979	652,493	429.33%
LQDH	iShares Interest Rate Hedged Corporate Bond ETF	43,314	145,385	335.65%
RGI	Invesco S&P 500 Equal Weight Industrials ETF	11,729	36,889	314.52%
HTRB	Hartford Total Return Bond ETF	34	77	223.92%
RWW	Oppenheimer S&P Financials Revenue ETF	2,108	5,418	257.06%
AIRR	First Trust RBA American Industrial Renaissance ETF	20,932	49,849	238.14%

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

| Contact: [email protected]

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.

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Weekly ETF Inflows See Rare Retreat

Weekly ETF Inflows See Rare Retreat

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