Substantial ETF inflows
Investors continued to pour a substantial amount of money into ETFs last week. According to FactSet, ETFs added $13.1 billion, which takes the year-to-date figure to $437 billion. It already crossed the previous yearly high. Almost 75% of last week’s total inflows were concentrated in US equity—JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), and Morgan Stanley (MS)—which added $9.8 billion. International equity was next with a collection of $998 million. US fixed income added $819 million, while international fixed income had $364.4 million. Commodities had moderate inflows of $279.7 million.
SPY was the biggest winner
Last week, the SPDR S&P 500 ETF Trust (SPY) was the biggest winner with inflows worth $4.63 billion. The Consumer Staples Select Sector SPDR Fund (XLP) had net creations of $1.06 billion. Other notable gainers included the iShares Russell 2000 ETF (IWM), the iShares Core S&P 500 ETF (IVV), and the Financial Select Sector SPDR Fund (XLF) with net additions of $1.03 billion, $864 million, and $842 million, respectively.
Outflows from smart beta ETFs
The smart beta ETFs that saw healthy inflows the previous week witnessed substantial outflows during the week. The iShares Edge MSCI Min Vol USA ETF (USMV), the iShares Edge MSCI USA Momentum Factor ETF (MTUM), and the iShares Edge MSCI USA Quality Factor ETF (QUAL) had outflows of $783 million, $671.9 million, and $432.2 million, respectively.
The Fed will announce its crucial interest rate decision this week. It’s widely expected to raise the rate 0.25%. In its November meeting, the Fed left the target range unchanged at 1%–1.25%. The Bank of England and the European Central Bank will also announce their interest rate decision this week. The United Kingdom and Australia will release the unemployment rate for October and November, respectively.