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ETF Inflows Are Gravitating towards Fixed Income

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Updated

Moderate inflows

After recording one of the highest outflows two weeks ago, ETFs experienced moderate inflows last week. According to FactSet data, US-listed ETFs had inflows worth $770 million. Now, the year-to-date inflows are $121 billion. Rising uncertainty in the equities market led to a shift in the inflows towards fixed-income assets. The outflows from international equity continued unabated with net redemptions of $1.9 billion. US fixed income collected $2.8 billion, while US equity had inflows of $748.6 million. Commodity ETFs experienced net redemptions of $1 billion due to a $690 million outflow from the SPDR Gold Trust (GLD).

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Inflows and outflows

Last week, the iShares ETFs had eight of the top-ten funds with the highest inflows coming from the group. The iShares 20+ Year Treasury Bond ETF (TLT) garnered $595.5 million, followed by the iShares Russell 2000 ETF (IWM) with $438.8 million and the iShares Core S&P 500 ETF (IVV) at $409 million.

The top loss was the iShares MSCI EAFE ETF (EFA) with net redemptions of $796.8 million. Other prominent ETFs that saw redemption pressure included the SPDR S&P 500 ETF Trust (SPY), the Invesco QQQ Trust (QQQ), and the Vanguard FTSE Emerging Markets ETF (VWO).

Upcoming events

The US is scheduled to report the inflation rate for June on Thursday. China is scheduled to release the inflation rate and the balance of trade data for June on Friday. The European Central Bank’s non-monetary and monetary policy meetings are scheduled on Wednesday and Thursday. The United Kingdom is scheduled to unveil its balance of trade data for May on Tuesday. The Bank of Canada is slated to decide on the interest rate movement on Wednesday.

JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) are scheduled to report their second-quarter numbers before the opening bell on July 13.

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