With the first quarter in the books, it is now known that
exchange traded products hauled in a record $70.1 billion,
topping the previous quarterly record of $65.5 billion set in
With U.S. equities racing to record highs, it was not
surprising to see capital surge into U.S. stock funds.
"While money still moved into bond products, 93% of the
inflows were into equities. In the U.S., equity products received
$37 billion in the first quarter, up 80% from a year earlier,"
said S&P Capital IQ in a new research note.
have been asset-gathering leaders, having hauled in $4.1 billion
on a year-to-date basis as of the end of March. There are now 34
low or minimum volatility ETPs trading globally with a combined
$11.2 billion in assets,
according to iShares data
. S&P Capital IQ favors the two largest U.S.-focused low
"While S&P Capital IQ's Equity Strategy Group believes
equities should move higher in the next 12 months from the
all-time highs reached in recent weeks, the journey will likely
be a volatile one," the research firm said.
With that potentially bumpy ride ahead for U.S. stocks,
S&P Capital IQ has an Overweight rating on the PowerShares
S&P 500 Low Volatility Portfolio (NYSE:
). SPLV is the dominant name among low volatility ETFs and now
has almost $4.5 billion in assets under management following its
May 2011 debut. As of April 8, SPLV had attracted $941.55 million
in new assets, making it the second-best PowerShares fund by that
according to issuer data
S&P also has an Overweight rating on SPLV's rival, the
iShares MSCI USA Minimum Volatility Index Fund (NYSE:
). Now home to $2.68 billion in AUM, USMV has also been among the
top asset-gathering ETFs in the U.S. this year. As S&P
Capital IQ notes, SPLV and USMV are noticeably different at the
For example, utilities and staples combine for about 55.3
percent of SPLV's weight. The utilities sector only accounts for
8.5 percent of USMV's weight compared with over 31 percent in
SPLV. Health care and staples combine for 33.5 percent of USMV's
"From a sector perspective, during the first quarter, the
leading performers were defensive, largely dividend-focused ones,
namely Health Care, Consumer Staples and Utilities," said
S&P. "Each was up more than 11.5% year to date through March.
We believe the $6.1 billion of inflows to U.S. dividend-themed
exchanged traded products this year has been a contributor to the
sector strength; there is now $68.5 billion in these
Regarding dividend ETFs, S&P has an Overweight rating on
the SPDR S&P Dividend ETF (NYSE:
), the second-largest dividend ETF by assets behind the Vanguard
Dividend Appreciation ETF (NYSE:
Looking outside the U.S., Japan ETFs attracted $8 billion in
inflows during the first quarter amid that country's efforts to
boost inflation and weaken the yen. Those efforts have been a
boon for the WisdomTree Japan Hedged Equity Fund (NYSE:
), which has seen a stunning level of inflows since late 2012.
DXJ now has $5.85 billion in AUM and is the top asset-gatherer
among all ETFs this year. S&P also rates DXJ Overweight.
For more on ETFs, click
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