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Huge Dip in ETF Flows for the Week

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Updated

US equity tops the outflows list

After registering the strongest inflows in January, ETFs witnessed huge outflows last week. The sharp rise in market volatility caused outflows of $18.9 billion from the ETFs. The year-to-date inflows have fallen to $51.9 billion.

According to FactSet, US equity (C) (BAC) (GS) (JPM) had the largest outflows of $21.8 billion. US markets witnessed huge sell-off last week. Even amid a huge slump in global equities, international equity ETFs added $827 million. US fixed income had inflows of $1.6 billion, while international fixed income had outflows of $484 million. Commodities continued to see outflows with net redemptions of $436 million.

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Notable gainers

There were a few ETFs that saw positive inflows last week. The iShares Core S&P 500 ETF (IVV) led the pack with the addition of $1.9 billion. Other notable gainers included the iShares Core MSCI EAFE ETF (IEFA), the ProShares Short VIX Short-Term Futures ETF (SVXY), and the iShares Russell 2000 ETF (IWM) with inflows of $1.7 billion, $1.6 billion, and $565 million, respectively.

SPY saw the highest outflows

Around 80% of last week’s outflows were concentrated in the SPDR S&P 500 ETF Trust (SPY) with net redemptions of $17.5 billion. The iShares MSCI EAFE ETF (EFA), the PowerShares QQQ Trust (QQQ), and the SPDR Dow Jones Industrial Average ETF Trust (DIA) also saw redemptions of $2.0 billion, $943 million, and $710 million, respectively.

As bond yields start rising, bond ETFs—the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) and the iShares JP Morgan USD Emerging Markets Bond ETF (EMB)—saw combined outflows of over $3 billion last week. The yield on the US ten-year bond increased by 12 basis points to 2.9%.

Upcoming events

Japan, Germany, Italy, and the Eurozone will release their fourth-quarter GDP growth rate. The US and the United Kingdom will release their crucial inflation rate for January. Consumer prices in the US increased 2.1% year-over-year in December. The US will also publish retail sales data for January. Japan will report its balance of trade data for January.

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