Understanding Why ETF Inflows Are Rising
Strong inflows in US fixed income
Despite the huge outflows at the beginning of last week, US-listed ETFs witnessed strong inflows with the addition of $7 billion, bringing the YTD (year-to-date) total to $329.3 billion. US equities (BAC) (MS) (JPM) (GS) added $1.8 billion, while international equity had inflows worth $2.3 billion.
US fixed income collected the highest inflows of $2.5 billion, even as the yield on benchmark ten-year bond rose nearly 2.3%. Commodities witnessed net additions of $440 million.
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The iShares Russell 2000 ETF (IWM) led with highest inflows of $1.5 billion, followed by the SPDR S&P 500 ETF Trust (SPY) with $1.1 billion, and the Vanguard S&P 500 ETF (VOO) with $692 million. The SPDR Gold Trust (GLD) raked in $575 million, while the iShares 20+ Year Treasury Bond ETF (TLT) added $532 million.
The largest outflow was seen by the iShares Core S&P 500 ETF (IVV), with net redemptions of $1.6 billion, followed by three ETFs from Vanguard—the Vanguard Mid-Cap ETF (VO), the Vanguard Small-Cap ETF (VB), and the Vanguard Small-Cap Growth ETF (VBK), which saw net outflows of $761 million, $555 million, and $356 million, respectively.
The week will see the release of final the US GDP figure for 2Q17. The US economy expanded at an annualized rate of 3% in 2Q17—well above a preliminary estimate of 2.6%. The US will also see the release of new home sales and durable goods data for August.
Meanwhile, Germany and the Eurozone will announce business confidence data, while the UK will issue consumer confidence data. Japan will release its inflation and unemployment rate for August, and Germany will publish preliminary inflation rate for September.