Heather Bell, Managing Editor, ETF.com
Despite it being a rough week for the markets, equity ETFs actually saw inflows for the week. A net $5.5 billion of new money entered U.S.-listed ETFs, including $4.1 billion in U.S. equity ETFs and $1.9 billion in international equity ETFs.
Low cost and low volatility were the key points of attraction. Cheap funds like the iShares Core S&P 500 ETF (IVV) and the Vanguard Total World Stock ETF (VT) netted assets during the week. So too did low-vol products, such as the Invesco S&P 500 Low Volatility ETF (SPLV) and the iShares Edge MSCI Min Vol U.S.A. ETF (USMV), both of which made the top 10 inflows list.
Another safety play, the Utilities Select Sector SPDR Fund (XLU), also garnered interest.
On the other hand, the VelocityShares 3X Inverse Natural Gas ETN (DGAZ) was a decidedly unsafe but popular play. The ETN, which allows traders to make bearish, leveraged wagers on natural gas prices, was pummeled this week as natural gas prices soared. DGAZ dropped 56% on Wednesday alone, but despite the free-fall, attracted inflows of $417 million this week. Inverse products as a whole pulled in $456 million.
Corporates Hemorrhage Assets
Fixed-income ETFs fell out of favor rather dramatically last week amid worries about the ability of corporate borrowers to repay their debts should the economy slow next year.
The iShares iBoxx USD High Yield Corporate Bond ETF (HYG), the iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD) and the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) saw some of the largest outflows during the period, losing between $328 million and $1.8 billion each.
U.S. fixed-income ETFs as a whole registered net outflows of $1.7 billion on the week, while the U.S. 10-year Treasury yield dropped from 3.19% to 3.07%.
So far this year, we’ve seen $233 billion in inflows for U.S.-listed ETFs, with total assets under management standing at about $3.5 trillion. About $104 billion of that has been in U.S. equity ETFs, with another $62.5 billion flowing into U.S. fixed-income ETFs. International equity ETFs have gained $46 billion. Meanwhile, commodity ETFs and currency ETFs were the only asset classes to see outflows year-to-date, losing $323 and $55 million, respectively.
6 ETFs Launched
Last week also saw six ETFs make their debut, including two each from BlackRock’s iShares arm, Prudential’s PGIM and newcomer Gadsden. The list includes the following:
- iShares iBonds Dec 2025 Term Muni Bond ETF (IBMN)
- iShares Global Green Bond ETF (BGRN)
- PGIM QMA Strategic Alpha Small-Cap Growth ETF (PQSG)
- PGIM QMA Strategic Alpha Small-Cap Value ETF (PQSV)
- Gadsden Dynamic Growth ETF (GDG)
- Gadsden Dynamic Multi-Asset ETF (GDMA)
Also on ETF.com
Confusing World Of ETF Premiums & Discounts
Muni Bond ETF Activity Grows
Are Precious Metals ETFs Broken?
Swedroe: Munis Increasingly Risky