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US Equity ETFs Continued to See Sharp Outflows

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US equity ETFs losing sheen

The uncertainty created by the US-China trade war continues to impact ETF inflows. According to FactSet, investors withdrew $3 billion out of US-listed ETFs last week, which takes the inflows down to $57.8 billion YTD (year-to-date). US equity continued to witness huge outflows with net redemptions of $9.7 billion, which indicates investors’ unease about rising volatility in US stocks. In contrast, international equity had positive inflows at $155 million. US fixed-income ETFs were more popular among investors. US fixed-income ETFs saw an addition of $4.9 billion, while international fixed-income collected $458 million.

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Fixed-income ETFs were the top gainers

Fixed-income ETFs were the top gainers of the week led by the iShares Short Treasury Bond ETF (SHV), which added $937 million. Other major bond ETFs that saw substantial inflows included the iShares 20+ Year Treasury Bond ETF (TLT), the iShares iBoxx $ High Yield Corporate Bond ETF (HYG), and the iShares 1-3 Year Treasury Bond ETF (SHY) with net creations of $850 million, $611 million, and $442 million, respectively. Equity ETFs like the Industrial Select Sector SPDR Fund (XLI) and the Financial Select Sector SPDR Fund (XLF) added combined inflows of more than $1 billion.

On the outflows side, the SPDR S&P 500 ETF Trust (SPY) was the top loser with net redemptions of $6.7 billion followed by the Consumer Staples Select Sector SPDR Fund (XLP) and the iShares Russell 2000 ETF (IWM).

Upcoming events

The US will report the inflation rate and retail sales for March. The US will also release the minutes from the recent FOMC (Federal Open Market Committee) meeting. China will release its balance of trade data and the inflation rate for March, while the United Kingdom will announce its balance of trade data for February. Germany will also release its balance of trade data for February.

BlackRock (BLK) is scheduled to report its 1Q18 earnings on Thursday, while JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C) and PNC (PNC) are scheduled to release their earnings on Friday.

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