What Bear Market? Investors Add $28B To ETFs

Unfazed by stock market volatility, ETF investors pushed 2018 inflows to the second-highest ever.

sumit
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Senior ETF Analyst
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Reviewed by: Sumit Roy
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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)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
IVWiShares S&P 500 Growth ETF2,671.0022,337.7011.96%
IVEiShares S&P 500 Value ETF2,048.7416,184.8612.66%
BSVVanguard Short-Term Bond ETF1,870.5127,665.596.76%
SHYiShares 1-3 Year Treasury Bond ETF1,790.6619,644.389.12%
IVViShares Core S&P 500 ETF1,462.97147,420.990.99%
VTVVanguard Value ETF1,342.3642,139.893.19%
IJSiShares S&P Small-Cap 600 Value ETF1,014.036,228.2716.28%
IEMGiShares Core MSCI Emerging Markets ETF872.5549,153.701.78%
IWMiShares Russell 2000 ETF855.6540,576.972.11%
IJJiShares S&P Mid-Cap 400 Value ETF814.906,145.6913.26%

Top 10 Redemptions (All ETFs)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
QQQInvesco QQQ Trust-1,538.1759,794.17-2.57%
XLFFinancial Select Sector SPDR Fund-1,512.3522,982.84-6.58%
XLVHealth Care Select Sector SPDR Fund-549.7318,455.52-2.98%
VGTVanguard Information Technology ETF-510.2017,458.73-2.92%
XLEEnergy Select Sector SPDR Fund-456.0613,481.26-3.38%
EZUiShares MSCI Eurozone ETF-431.026,612.05-6.52%
VNQVanguard Real Estate ETF-423.6529,090.46-1.46%
JNKSPDR Bloomberg Barclays High Yield Bond ETF-410.487,575.46-5.42%
KRESPDR S&P Regional Banking ETF-377.052,850.50-13.23%
DIASPDR Dow Jones Industrial Average ETF Trust-353.3019,902.26-1.78%

ETF Weekly Flows By Asset Class

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity12,964.931,896,678.770.68%
International Equity6,286.67736,258.150.85%
U.S. Fixed Income7,843.84585,953.681.34%
International Fixed Income-342.4165,967.85-0.52%
Commodities 175.3160,946.350.29%
Currency1.431,756.610.08%
Leveraged816.8930,544.012.67%
Inverse-422.6612,299.77-3.44%
Asset Allocation257.909,141.822.82%
Alternatives-81.224,928.90-1.65%
Total:27,500.673,404,475.900.81%

Asset Classes (Year-to-Date)

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity136,792.871,896,678.777.21%
International Equity66,259.80736,258.159.00%
U.S. Fixed Income81,187.64585,953.6813.86%
International Fixed Income10,872.5665,967.8516.48%
Commodities ETFs-274.0460,946.35-0.45%
Currency-111.661,756.61-6.36%
Leveraged7,560.3730,544.0124.75%
Inverse1,715.5812,299.7713.95%
Asset Allocation1,251.729,141.8213.69%
Alternatives310.874,928.906.31%
Total:305,565.703,404,475.908.98%

Top 10 Volume Surprises, Funds >$50 mm AUM

TickerNameAverage Volume
(30 Day)
1 Week Average
Volume
% of Average
USEQInvesco Russell 1000 Enhanced Equal Weight ETF118,348775,191655.01%
GNAFMicroSectors FANG+ Index Inverse ETN3181,900596.66%
EAGGiShares ESG U.S. Aggregate Bond ETF1,3116,859523.22%
EQALInvesco Russell 1000 Equal Weight ETF143,505709,657494.52%
HYGHiShares Interest Rate Hedged High Yield Bond ETF105,493504,955478.66%
HYHGProShares High Yield-Interest Rate Hedged ETF46,770195,579418.17%
HFXIIQ 50 Percent Hedged FTSE International ETF137,238526,056383.32%
IHYVanEck Vectors International High Yield Bond ETF50,157191,902382.60%
ELDWisdomTree Emerging Markets Local Debt Fund45,040153,952341.81%
MUNIPIMCO Intermediate Municipal Bond Active ETF69,797232,174332.64%

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 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.