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US Equities See Outflows of $3.1 Billion

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Jan. 26 2016, Updated 4:17 p.m. ET

US equity outflows

In the week ended January 22, 2016, US equities saw total outflows of $3.1 billion compared to $1 billion in the previous week. These equities saw outflows due to slow growth, contraction in the manufacturing sector, and the perceived outperformance of European equities.

The US economy saw unemployment claims rise in December 2015 combined with lower inflation. Mutual fund companies such as American Funds, Vanguard, T. Rowe Price Group (TROW), and Janus Capital Group (JNS) are likely to be negatively affected by falls in investments.

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ETF investment outflows

The ETF market has fallen significantly over the span of just a decade to more than $3 trillion. US equities form more than 65% of total ETF allocation.

In the week ended January 8, 2016, the PowerShares QQQ ETF (QQQ), the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), the iShares Russell 1000 Value ETF (IWD), the SPDR S&P Regional Banking ETF (KRE), the iShares Russell 2000 ETF (IWM), the iShares Russell 1000 Growth ETF (IWF), the Guggenheim S&P 500 Equal Weight ETF (RSP), and the Energy Select Sector SPDR ETF (XLE) saw a combined net outflow of $5.4 billion.

Investors pulled money from bonds, mid-caps, regional banks, and the energy sector.

ETF investment inflows

The ETFs that attracted investments during the week included the SPDR S&P 500 ETF (SPY), the iShares Short Treasury Bond ETF (SHV), the iShares 20+ Year Treasury Bond ETF (TLT), the Vanguard S&P 500 ETF (VOO), the iShares 7-10 Year Treasury Bond ETF (IEF), the iShares Core US Aggregate Bond ETF (AGG), the Utilities Select Sector SPDR ETF (XLU), the Vanguard Total Stock Market ETF (VTI), the Consumer Staples Select Sector SPDR ETF (XLP), and the iShares Core S&P 500 ETF (IVV).

Together, these funds attracted $10.4 billion in investments.

Utilities, the broad index, and treasuries attracted investments backed by positive indicators in these sectors. Asset managers such as State Street (STT), Vanguard, and BlackRock (BLK) are major players in ETF offerings across the United States, Europe, and Asia.

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