Financials Overview: Week of July 31–August 4, 2017

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Part 3
Financials Overview: Week of July 31–August 4, 2017 PART 3 OF 3

ETF Inflows Will Likely Surpass Last Year’s Total

Fixed-income ETFs continued to rise

The US-listed ETFs saw net inflows worth $6.90 billion during the week, which took the inflows to $280 billion YTD. In the next few weeks, inflows will likely surpass last year’s total of $287.5 billion. Except for commodities (POT) (AA) (FCX) and currency, all of the other asset classes saw positive inflows during the week. The inflows were led by US-fixed income with $2.46 billion—followed by international equity with $2.38 billion and US equity with $1.30 billion. Commodities (ABX) saw outflows worth $121.4 million, while currency had $7 million.

ETF Inflows Will Likely Surpass Last Year&#8217;s Total

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The iShares Russell 2000 ETF (IWM), which saw more than $3 billion worth of outflows for the year, witnessed a trend reversal with net inflows of $1.84 billion—far higher than the Vanguard FTSE Developed Markets ETF (VEA) with $1 billion and the iShares Core S&P 500 ETF (IVV) with $732 million.

The PowerShares QQQ Trust (QQQ) continued to witness outflows this week with net redemptions of $1.39 billion. It was followed by the SPDR S&P 500 ETF Trust (SPY) with $1.08 billion and the Consumer Staples Select Sector SPDR Fund (XLP) with $447.4 million.

Why are the rates low?

In a speech delivered in Rio de Janeiro, Fed Vice Chair Stanley Fischer said that interest rates are low because of a weak economy and other factors.

Upcoming events

This week, the balance of trade data will be released for China, Germany, and the United Kingdom. China’s inflation data will also be released. Consumer prices in China are expected to rise ~1.5% in July.


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