Huge outflows from US equity
The sharp rebound in the market last week didn’t improve investors’ sentiment. There was a huge decline in ETF inflows. According to FactSet, ETFs witnessed outflows of $9.6 billion, which lowered the inflows to $52.7 billion YTD (year-to-date). Most of the total ETF outflows were led by US equity (BAC) (GS) (JPM), which saw net redemptions of $9.3 billion. International equity had moderate inflows of $301 million. Fixed-income ETFs also experienced modest outflows. US fixed income had outflows of $611 million, while international fixed income outflows were restricted to $74 million. Commodities had inflows of $128.3 million.
SPY was the biggest laggard
The SPDR S&P 500 ETF Trust (SPY) was responsible for all of the outflows from US equity. SPY experienced net redemptions of $12.7 billion, which brought its YTD outflows to $18.5 billion. In contrast, other US-listed equity ETFs collected healthy inflows during the week. The iShares Core MSCI EAFE ETF (IEFA) was the top gainer with a collection of $1.8 billion, while the iShares Core S&P 500 ETF (IVV) had net inflows of $1.1 billion. Other ETFs with positive inflows included the Consumer Staples Select Sector SPDR Fund (XLP), the First Trust Dow Jones Internet Index Fund (FDN), and the Vanguard S&P 500 ETF (VOO) with combined inflows of $1.7 billion.
The other ETFs that saw substantial outflows included the Vanguard Information Technology ETF (VGT), the Industrial Select Sector SPDR Fund (XLI), and the iShares MSCI Eurozone ETF (EZU). Bond ETFs like the iShares Core U.S. Aggregate Bond ETF (AGG) and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) had combined outflows of $1.2 billion.
The US will report the inflation rate for February. Consumer prices in the US increased 2.1% in January. The US will also announce retail sales data for February. US retail trade fell 0.3% month-over-month in January. The Swiss National Bank will decide on the interest rate. The Bank of Japan’s monetary policy meeting minutes will also be revealed this week. In Russia, the presidential election will take place on March 18, 2018.