Smart Beta ETFs Were the Real Stars Last Week



Strong ETF inflows

ETF inflows remained strong last week amid rising markets. FactSet data showed that ETFs added $13.2 billion, which took the year-to-date total to $423 billion. US equity (JPM) (BAC) (C) (WFC) added the highest inflows worth $8.2 billion. International equity collected $2.8 billion even as the MSCI All-Country Index rose for 13 consecutive months through November—the longest winning streak. US fixed income continued to receive comparatively moderate inflows. It added $1.6 billion, while international equity collected $373.8 million. Commodities were the only asset class that saw outflows with net redemptions of $145.9 million.

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Smart beta ETFs shine

The iShares Russell 2000 ETF (IWM) garnered the largest chunk of weekly ETF inflows at $1.45 billion. However, the real stars during the week were smart beta ETFs that saw strong inflows after many weeks. The iShares Edge MSCI USA Momentum Factor ETF (MTUM) and the iShares Edge MSCI Min Vol USA ETF (USMV) added $847.5 million and $829 million, respectively. The financial ETFs also had sizable inflows. The Financial Select Sector SPDR Fund (XLF) and the SPDR S&P Regional Banking ETF (KRE) added $696.3 million and $612.5 million, respectively.

The outflows during the week were led by the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) with net redemptions of $82.8 million. Other prominent ETFs that saw outflows included the Technology Select Sector SPDR Fund (XLK) and the VanEck Vectors Semiconductor ETF (SMH) with net redemptions of $552.3 million and 308.4 million, respectively.

Upcoming events

The Eurozone will release the third estimate for the third quarter GDP growth rate. Australia will release its first estimate of third quarter GDP data. The central banks in India, Canada, and Australia will announce their interest rate decision. Canada, the US, Australia, the United Kingdom, Germany, and China will reveal their balance of trade data this week. The US will announce the unemployment rate for November. China will publish inflation rate for November.


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