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Dow Jones Index ETF Most Popular So Far This Year

Drew Voros

ETF.com Editor-in-Chief

After taking a back seat for years to ETFs based on the S&P 500 [SPDR S&P 500 ETF Trust (SPY)] and Nasdaq [PowerShares QQQ Trust (QQQ)], the SPDR Dow Jones Industrial Average ETF Trust (DIA) is having a breakout start to the year.

The fund, based on the venerable and—to some–controversial Dow Jones Industrial Average Index, is the most popular ETF so far this year, and has taken in $2.56 billion in new assets since the beginning of the year. That’s the most of any U.S.-listed ETF in 2017.

Last week alone, DIA saw inflows of $1.1 billion, an increase of 6.6% in assets under management. The now-$17.5 billion fund’s performance and demand have been hot since the election, with $4.5 billion in new assets since Nov. 8, and is up more than 12%, outpacing QQQ (up 10%) and SPY (up 9.7%) during the same period.

Overall, money continues to flow heavily into the U.S. ETF market. Last week, $10.3 billion in new assets came into the market. With January’s $40 billion in inflows setting a new monthly record for ETFs, the total so far in 2017 is well above $50 billion.

The current pace certainly may give last year’s record of $284 billion in inflows a run for its money.

Strong Month For Active ETF Demand

January 2017 was good for active management in the ETF space. Inflows to active ETFs reached almost $1 billion: $994,118,875, to be exact. Active fixed income continues to dominate, while active equity and commodity funds also saw inflows. But the gains were concentrated in a few segments—not widely dispersed. Actively managed currency and multi-asset ETFs saw outflows.

Bank loans and master limited partnerships accounted for over 50% of the flows to actively managed ETFs. Active flows to MLP ETFs account for 23% of all MLP flows—a clear gain in a segment where passive management has a strong presence.

Two New ETFs Launch

Last week saw two new ETFs launch. WisdomTree launched the Global ex-Mexico Equity Fund (XMX), which will track an index that selects and weights its components based on market capitalization, despite the fact that almost all of WisdomTree’s other equity ETFs are weighted by either dividends or earnings. The new fund comes with an expense ratio of 0.30% and is listed on the NYSE Arca.

While on the surface this global fund that excludes Mexico may seem to be designed with President Trump in mind, the filing for the ETF happened in January 2015, long before Trump was considered a serious candidate. WisdomTree has already cross-listed some 32 ETFs on the Mexico stock exchange, and if it does the same with XMX, there is likely to be interest from Mexico investors in a global fund that excludes domestic exposure.

Also last week, the second InfraCap-branded ETF launched on the NYSE Arca. The InfraCap REIT Preferred ETF (PFFR) comes with an expense ratio of 0.45%. PFFR’s index targets REIT-preferred securities that have at least $75 million, average 250,000 shares traded over a six-month period and have a yield-to-call of at least 3%. The index includes all the securities that meet its criteria, which translated into an index of 31 securities from 26 issuers as of Sept. 30, 2016, the prospectus said.

Drew Voros can be reached at dvoros@etf.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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