Yearly ETF Inflows Hit $125B Despite Fed Rate Hike

Investors added money into ETFs for a 19th-straight week.

The first rate hike of the year from the Federal Reserve didn't dissuade investors from buying exchange-traded funds. Inflows into U.S.-listed ETFs continued at a torrid pace, as $19 billion came into the space in the week ending Thursday, March 16, according to FactSet. The year-to-date total for inflows now stands at $124.7 billion.

U.S. equity funds took in the bulk of new money as the S&P 500 hovered near record highs. Inflows into this segment totaled $13.2 billion. 

International equity ETFs also garnered favor, with $3.5 billion worth of weekly inflows. A victory for a mainstream party in the Dutch elections over a populist anti-EU party was a sigh of relief for investors who want to see the status quo maintained in Europe. 

Meanwhile, U.S. fixed-income ETFs saw inflows to the tune of $1.9 billion despite the Fed's rate hike on Wednesday. Even though it was the second rate hike in three months, the Treasury market rallied after the news. The 10-year bond yield fell from around 2.6% to 2.5% week-over-week (bond prices and yields move inversely).

International fixed-income ETFs had much more modest inflows, of $144 million, while commodity ETFs had inflows of $241 million.

Dividend & Small-Cap ETFs See Inflows
The SPDR S&P 500 ETF (SPY) took the top spot on the weekly inflows list, with $2.5 billion of inflows, followed by the Vanguard Dividend Appreciation Index Fund (VIG), with its $1.5 billion of inflows. 

VIG was one of two dividend-focused ETFs to make the top 10. The other was the Vanguard High Dividend Yield Index Fund (VYM), with $673 million worth of inflows. 

A pair of small-cap funds made the cut as well. The Vanguard Small-Cap Index Fund (VB) and the Vanguard Small Cap Value Index Fund (VBR) had creations of $1 billion and $697 million, respectively. 

Other standouts in the top 10 included the iShares 20+ Year Treasury Bond ETF (TLT), the SPDR Oil & Gas Exploration & Production ETF (XOP) and the Utilities Select Sector SPDR Fund (XLU). Each fund had about $600 million worth of inflows for the week.

Outflows From 'JNK' & 'XLE' As Oil Prices Drop
On the outflows side, the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) easily took the top spot, with redemptions of $947 million. Junk bonds hit a bit of a road bump during the past week as the sell-off in oil prices raised worries about energy sector defaults. 

The Energy Select Sector SPDR Fund (XLE) also fell out of favor amid the oil price skid. It had outflows of $259 million in the period. 

Other sector or industry funds to see redemptions were the SPDR S&P Regional Banking ETF (KRE), the iShares U.S. Real Estate ETF (IYR), the iShares U.S. Technology ETF (IYW) and the Consumer Staples Select Sector SPDR Fund (XLP). Outflows from these funds ranged from $120 million to $240 million.

Finally, the iShares MSCI Japan ETF (EWJ) was a notable international fund to see sizable redemptions. Outflows for the week for EWJ totaled $510 million.

For a full list of this week's top inflows and outflows, see the tables below:
 

Top 10 Creations (All ETFs)

Top 10 Redemptions (All ETFs)

ETF Weekly Flows By Asset Class

Top 10 Volume Surprises, Funds >$50 mm AUM

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.