ETF Inflows Set a New Annual Record



US equity at the top

As the broader stock indexes continued to make new highs, ETFs also continued to witness record inflows. According to FactSet data, $15.2 billion worth of inflows was added to ETFs last week, which takes the YTD (year-to-date) total to $369 billion—a new annual record. Except for commodities, all of the other major asset classes witnessed heavy inflows. US equity (JPM) (BAC) (C) (WFC) collected the highest inflows worth $9.5 billion, while international equity had net creations of $3.5 billion. US fixed income pulled in $1.9 billion, while international fixed income added a moderate $242 million. Commodities had outflows of $142 million.

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SPY’s assets under management

The SPDR S&P 500 ETF Trust (SPY), which witnessed net redemptions of $866 million two weeks ago, attracted the highest inflows of $4.2 billion. SPY’s total assets under management have reached $250 billion—the highest ever for SPY. Despite huge inflows this week, SPY still has net outflows of $6.7 billion YTD. The other major gainers during the week included the iShares Core U.S. Aggregate Bond ETF (AGG), the iShares Core MSCI Emerging Markets ETF (IEMG), and the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) with inflows of $614 million, $572 million, and $461 million, respectively.

The top ETFs that saw outflows included the PowerShares QQQ Trust (QQQ) and the iShares 3-7 Year Treasury Bond ETF (IEI) with net redemptions of $334 million and $308 million, respectively.

Upcoming events

Japan goes to the poll this week. The incumbent Prime Minister Shinzo Abe is expected to win the election. The United Kingdom and South Korea will report their third quarter GDP numbers. In 2Q17, South Korea’s economy rose 0.6%, while the United Kingdom’s economy rose 0.3%. The Bank of Canada will decide on the interest rate hike this week. The Bank of Canada raised its benchmark rate by 25 basis points to 1% at its meeting on September 6, 2017. The US will release new home sales data for September.


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