What Bear Market? Investors Add $28B To ETFs

Senior ETF Analyst

Dec 21, 2018

Reviewed by: Sumit Roy

Edited by: Sumit Roy

What bear market? Either oblivious to the turmoil hitting U.S. stocks in December—or sensing opportunity—ETF investors plowed billions of dollars into exchange-traded products this week.

Despite another big down week in the market, putting the S&P 500 on track for its worst December performance since the Great Depression, and more than 17% off its all-time highs, investors added $27.5 billion to ETFs during the week ending Thursday, Dec. 20.

The inflows were led by U.S. equity ETFs, which pulled in $13 billion. International equity ETFs and U.S. fixed-income ETFs also saw strong inflows, of $6.3 billion and $7.8 billion, respectively.

Year-to-date net inflows for all ETFs in 2018 now total $305.6 billion, the second-largest annual haul ever.

S&P 500 ETFs Pick Up Assets

After this week’s sell-off, U.S. small-cap and midcap stocks are down more than 20% from their all-time highs, a level some call a bear market. The S&P 500 is close behind, with only a few percentage points to go before it hits that ominous threshold.

But ETF investors aren’t running scared. If anything, they are taking full advantage of the downturn to load up on stocks. The iShares S&P 500 Growth ETF (IVW), the iShares S&P 500 Value ETF (IVE) and the iShares Core S&P 500 ETF (IVV) all saw billions of dollars’ worth of inflows this week.

Investors also continued to like Treasuries, and short-term Treasuries in particular. The iShares 1-3 Year Treasury Bond ETF (SHY) picked up $1.8 billion of new money this week as bond prices rallied and interest rates sagged to multimonth lows—a counterintuitive reaction to the Fed’s rate hike this week.

Outflows From Sector ETFs

While broad market ETFs were in favor this week, certain sector ETFs faced heavy outflows. The Financial Select Sector SPDR Fund (XLF), the Health Care Select Sector SPDR Fund (XLV), the Vanguard Information Technology ETF (VGT) and the Energy Select Sector SPDR Fund (XLE) had redemptions of more than $450 million each.

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
IVW	iShares S&P 500 Growth ETF	2,671.00	22,337.70	11.96%
IVE	iShares S&P 500 Value ETF	2,048.74	16,184.86	12.66%
BSV	Vanguard Short-Term Bond ETF	1,870.51	27,665.59	6.76%
SHY	iShares 1-3 Year Treasury Bond ETF	1,790.66	19,644.38	9.12%
IVV	iShares Core S&P 500 ETF	1,462.97	147,420.99	0.99%
VTV	Vanguard Value ETF	1,342.36	42,139.89	3.19%
IJS	iShares S&P Small-Cap 600 Value ETF	1,014.03	6,228.27	16.28%
IEMG	iShares Core MSCI Emerging Markets ETF	872.55	49,153.70	1.78%
IWM	iShares Russell 2000 ETF	855.65	40,576.97	2.11%
IJJ	iShares S&P Mid-Cap 400 Value ETF	814.90	6,145.69	13.26%

Top 10 Redemptions (All ETFs)

Ticker	Name	Net Flows ($,mm)	AUM ($, mm)	AUM % Change
QQQ	Invesco QQQ Trust	-1,538.17	59,794.17	-2.57%
XLF	Financial Select Sector SPDR Fund	-1,512.35	22,982.84	-6.58%
XLV	Health Care Select Sector SPDR Fund	-549.73	18,455.52	-2.98%
VGT	Vanguard Information Technology ETF	-510.20	17,458.73	-2.92%
XLE	Energy Select Sector SPDR Fund	-456.06	13,481.26	-3.38%
EZU	iShares MSCI Eurozone ETF	-431.02	6,612.05	-6.52%
VNQ	Vanguard Real Estate ETF	-423.65	29,090.46	-1.46%
JNK	SPDR Bloomberg Barclays High Yield Bond ETF	-410.48	7,575.46	-5.42%
KRE	SPDR S&P Regional Banking ETF	-377.05	2,850.50	-13.23%
DIA	SPDR Dow Jones Industrial Average ETF Trust	-353.30	19,902.26	-1.78%

ETF Weekly Flows By Asset Class

	Net Flows ($, mm)	AUM ($, mm)	% of AUM
U.S. Equity	12,964.93	1,896,678.77	0.68%
International Equity	6,286.67	736,258.15	0.85%
U.S. Fixed Income	7,843.84	585,953.68	1.34%
International Fixed Income	-342.41	65,967.85	-0.52%
Commodities	175.31	60,946.35	0.29%
Currency	1.43	1,756.61	0.08%
Leveraged	816.89	30,544.01	2.67%
Inverse	-422.66	12,299.77	-3.44%
Asset Allocation	257.90	9,141.82	2.82%
Alternatives	-81.22	4,928.90	-1.65%
Total:	27,500.67	3,404,475.90	0.81%

Asset Classes (Year-to-Date)

	Net Flows ($, mm)	AUM ($, mm)	% of AUM
U.S. Equity	136,792.87	1,896,678.77	7.21%
International Equity	66,259.80	736,258.15	9.00%
U.S. Fixed Income	81,187.64	585,953.68	13.86%
International Fixed Income	10,872.56	65,967.85	16.48%
Commodities ETFs	-274.04	60,946.35	-0.45%
Currency	-111.66	1,756.61	-6.36%
Leveraged	7,560.37	30,544.01	24.75%
Inverse	1,715.58	12,299.77	13.95%
Asset Allocation	1,251.72	9,141.82	13.69%
Alternatives	310.87	4,928.90	6.31%
Total:	305,565.70	3,404,475.90	8.98%

Top 10 Volume Surprises, Funds >$50 mm AUM

Ticker	Name	Average Volume (30 Day)	1 Week Average Volume	% of Average
USEQ	Invesco Russell 1000 Enhanced Equal Weight ETF	118,348	775,191	655.01%
GNAF	MicroSectors FANG+ Index Inverse ETN	318	1,900	596.66%
EAGG	iShares ESG U.S. Aggregate Bond ETF	1,311	6,859	523.22%
EQAL	Invesco Russell 1000 Equal Weight ETF	143,505	709,657	494.52%
HYGH	iShares Interest Rate Hedged High Yield Bond ETF	105,493	504,955	478.66%
HYHG	ProShares High Yield-Interest Rate Hedged ETF	46,770	195,579	418.17%
HFXI	IQ 50 Percent Hedged FTSE International ETF	137,238	526,056	383.32%
IHY	VanEck Vectors International High Yield Bond ETF	50,157	191,902	382.60%
ELD	WisdomTree Emerging Markets Local Debt Fund	45,040	153,952	341.81%
MUNI	PIMCO Intermediate Municipal Bond Active ETF	69,797	232,174	332.64%

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.

Sumit Roy

| Contact: [email protected]

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.

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What Bear Market? Investors Add $28B To ETFs

What Bear Market? Investors Add $28B To ETFs

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