Highest ETF Outflows in Three Months



Huge outflows from US equity

Due to the reconstitution of the Russell indices, US-listed ETFs saw huge outflows last week. FactSet data showed that ETFs posted net outflows of $21.6 billion during the week, which pushed the year-to-date inflows down to $129.4 billion—the largest outflows since late March. US equity (GS) (MS) (BAC) registered outflows of $21.2 billion, while international equity had net redemptions of $4 billion. US equity outflows were mainly concentrated in the iShares Russell ETFs. US fixed-income ETFs was the only asset class that garnered positive inflows for the week. US fixed-income ETFs added $3.8 billion, while international fixed-income ETFs saw moderate redemptions of $13.8 million.

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Russell-indexed ETFs dominated the outflows

Last week, fixed-income ETFs were strong and collected substantial inflows. The iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD) topped the collection chart with net inflows of $1.2 billion. The Vanguard Mortgage-Backed Securities ETF (VMBS), the iShares U.S. Treasury Bond ETF (GOVT), the Vanguard Short-Term Bond ETF (BSV), and the iShares Core U.S. Aggregate Bond ETF (AGG) added combined inflows of $2.7 billion.

The SPDR S&P 500 ETF Trust (SPY) was the top loss with net redemptions of $5 billion. However, seven of the ten ETFs with the biggest outflows track the Russell indices. They reported combined net redemptions of $13.8 billion. The iShares Russell ETFs like the iShares Russell 1000 Growth ETF (IWF), the iShares Russell 1000 Value ETF (IWD), and the iShares Russell Mid-Cap Growth ETF (IWP) were some of the top losses in the group.

Upcoming events

The US is scheduled to release the FOMC’s meeting minutes on July 5. The US is scheduled to unveil the balance of trade data for May, non-farm payrolls data, and the unemployment rate for June on July 6. The European Union is scheduled to disclose the unemployment rate for May on July 2, while Canada is scheduled to announce the unemployment rate for June on July 6.


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