Weekly ETF Inflows See Rare Retreat
Sector index shift triggers rotation and rebalancing in and out of sector ETFs.
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.