Yearly ETF Inflows Set New Record

The post-election stampede into ETFs continued this week, pushing 2016's total inflows into record territory.

sumit
|
Senior ETF Analyst
|
Reviewed by: Sumit Roy
,
Edited by: Sumit Roy

The post-election investor stampede into ETFs continued this week, as optimism remained high about the outlook for U.S. stocks and the U.S. economy heading into 2017. Altogether, $25.4 billion came into U.S.-listed exchange-traded funds in the week ending Thursday, Dec. 15, according to FactSet. Year-to-date flows now stand at $252.8 billion, above the previous annual record of $244 billion set in 2014. 

Of this week's flows, the vast majority―or $22.1 billion―went into U.S. equity exchange-traded funds. On Tuesday, the S&P 500 hit a record-high 2,278 before paring its gains modestly later in the week after the Federal Reserve hiked interest rates for the first time in a year. As of this writing, the large-cap index was up 12.5% year-to-date, including dividends. At the same time, the small-cap Russell 2000 was up a sizzling 21.4%.

Other segments to see inflows were international equity ETFs, with net creations of $3.3 billion; and U.S. fixed-income ETFs, with net creations of $314 million. 

U.S. Treasurys continued to tumble this week following the Fed's rate increase. The 10-year bond yield hit 2.62% on the back of guidance from the central bank that suggested three more rate hikes could be coming next year (bond prices and yields move inversely). 

Meanwhile, two ETF segments to see outflows this week were international fixed income, with redemptions of $155 million; and commodities, with redemptions of $834 million.

Broad Market ETF Giants Get Bigger
In terms of individual ETFs, the biggest winners this week were ETF heavyweights such as the SPDR S&P 500 ETF (SPY) and the PowerShares QQQ Trust (QQQ), with inflows of $7.4 billion and $2.6 billion, respectively. In fact, every fund on this week's top 10 flows list has assets of more than $10 billion―except one.

The iShares MSCI EAFE Value ETF (EFV) is the smallest fund on the list. It had inflows of $522 million during the period, pushing its total assets under management to $4.3 billion.

In addition to large-cap ETFs such as SPY, the iShares Core S&P 500 ETF (IVV), the Vanguard S&P 500 Index Fund (VOO) and the SPDR Dow Jones Industrial Average ETF (DIA)several mid- and small-cap fundswere also in favor this week.

The Vanguard Mid-Cap Index Fund (VO) had inflows of $1.6 billion; the Vanguard Small Cap Value Index Fund (VBR) had inflows of $672 million; and the Vanguard Small-Cap Index Fund (VB) had inflows of $638 million. 

Outflows For LQD, GLD & Sector Funds 
On the other side of the ledger, the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) was the biggest ETF loser of the week, with outflows of $790 million. Like Treasurys, U.S. investment-grade corporate bonds were hammered since the election. LQD last had a year-to-date return of 4.6%, compared with nearly 11% at its 2016 highs.

Another fixed-income loser this week was the iShares 20+ Year Treasury ETF (TLT), with outflows of almost $250 million. Year-to-date, TLT is now down about 3%, compared with a gain of 20% at its highs. That's a perfect illustration of the roller-coaster ride fixed-income ETFs have seen this year. 

At the No. 2 position on the weekly outflows list was the SPDR Gold Trust (GLD). GLD's $687 million worth of outflows is a continuation of the slow bleed the physically backed gold ETF has seen since Trump's victory on Nov. 8. Gold prices dropped to a fresh 10-month low of $1,121 on Friday, pushing the metal's year-to-date gain down to 7%.

Rounding out the 10 ETFs on this week's outflows list were a number of sector and industry funds. The iShares Cohen & Steers REIT ETF (ICF) saw outflows of $405 million; the iShares U.S. Real Estate ETF (IYR) had outflows of $392 million; and the Financial Select Sector SPDR Fund (XLF) garnered outflows of $309 million.

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
SPYSPDR S&P 500 ETF Trust7,421.69226,349.413.39%
QQQPowerShares QQQ Trust2,617.2241,770.946.68%
VOVanguard Mid-Cap Index Fund1,583.3918,041.019.62%
IVViShares Core S&P 500 ETF1,274.7091,170.141.42%
DIASPDR Dow Jones Industrial Average ETF Trust900.1714,765.996.49%
VEAVanguard FTSE Developed Markets ETF702.7339,116.961.83%
VBRVanguard Small Cap Value Index Fund672.4610,357.506.94%
VBVanguard Small-Cap Index Fund638.4316,556.264.01%
VOOVanguard S&P 500 Index Fund638.3757,165.951.13%
EFViShares MSCI EAFE Value ETF522.494,277.9113.91%

Top 10 Redemptions (All ETFs)

TickerNameNet Flows ($,mm)AUM ($, mm)AUM % Change
LQDiShares iBoxx $ Investment Grade Corporate Bond ETF-790.4327,717.59-2.77%
GLDSPDR Gold Trust-686.9731,470.61-2.14%
ICFiShares Cohen & Steers REIT ETF-405.133,423.58-10.58%
IYRiShares U.S. Real Estate ETF-391.783,596.69-9.82%
XLIIndustrial Select Sector SPDR Fund-335.8010,155.58-3.20%
XLFFinancial Select Sector SPDR Fund-309.4622,450.45-1.36%
XRTSPDR S&P Retail ETF-287.55503.01-36.37%
KRESPDR S&P Regional Banking ETF-286.553,255.89-8.09%
TLTiShares 20+ Year Treasury Bond ETF-248.575,014.37-4.72%
XLPConsumer Staples Select Sector SPDR Fund-246.687,773.12-3.08%

ETF Weekly Flows By Asset Class

 Net Flows ($, mm)AUM ($, mm)% of AUM
U.S. Equity22,094.721,479,391.901.49%
International Equity3,276.74509,307.430.64%
U.S. Fixed Income313.64405,795.270.08%
International Fixed Income-155.2139,681.96-0.39%
Commodities-834.3962,387.45-1.34%
Currency39.203,111.241.26%
Leveraged160.6723,743.440.68%
Inverse309.1217,889.921.73%
Asset Allocation109.496,576.821.66%
Alternatives79.134,093.421.93%
Total:25,393.112,551,978.841.00%

Top 10 Volume Surprises, Funds >$50 mm AUM

TickerNameAverage Volume
(30 Day)
1 Week Average
Volume
% of Average
DGTSPDR Global Dow ETF2,6669,245346.76%
EIRLiShares MSCI Ireland Capped ETF52,810217,877412.57%
LRGFiShares FactorSelect MSCI USA ETF165,704317,626191.68%
XHSSPDR S&P Health Care Services ETF32,22155,855173.35%
SCIUGlobal X Scientific Beta US ETF5,6469,862174.66%
OILB 124327263.79%
ONEOSPDR Russell 1000 Momentum Focus2,3214,658200.68%
LTPZPIMCO 15+ Year US TIPS Index ETF17,96151,123284.63%
JKHiShares Morningstar Mid-Cap Growth ETF3,4155,265154.14%
FLRNSPDR Barclays Investment Grade Floating Rate ETF127,224219,488172.52%

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.