Huge Dip in ETF Flows for the Week



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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