November ETF Flows Ebb, But Still Solid

ETF Trends

Global exchange traded products  saw November inflows of $15.8 billion, well below the $32.9 billion seen in October. Speculation that the Federal Reserve could taper its quantitative easing program sooner than some market participants would like to see tempered inflows last month.

“US Equity and Broad Developed Markets led asset gathering for the month with $9.9bn and $7.2bn. Funds tracking the S&P 500 and MSCI EAFE indices drove much of the activity. These two categories also account for 81% of global ETP flows year-to-date,” according to a report released Monday by BlackRock (BLK), parent company of iShares, the world’s largest ETF issuer.

Core exposures, primarily U.S. large caps, took in $8.7 billion, but small-caps saw outflows of $2.4 billion, according to BlackRock data. Sector ETFs pulled in $3.4 billion in November with investors favoring industrial, health care, energy and consumer cyclical ETFs.

Confirming that inflows to health care and industrial sector funds have recently been robust, the Health Care Select Sector SPDR (XLV) and the Industrial Select Sector SPDR (XLI) are now the third- and fourth-largest sector ETFs, respectively, forcing the Energy Select Sector SPDR (XLE) into the fifth spot. [Health Care SPDR now Third-Largest Sector ETF]

Short maturity bond ETFs gained $1.9 billion last month, but overall, bond ETFs shed $1 billion in assets.

“The most popular Fixed Income ETPs in November were Broad Aggregate US funds, counter to the trend most of the year. Investment Grade Corporate continued to see outflows while High Yield Corporate attracted $0.5bn, mostly from Short Maturity funds. Riskier Fixed Income ETP segments such as Emerging Markets debt were out of favor. Notably, Emerging Markets debt has modest year-to-date inflows but splitting out local currency ETPs changes the picture as these funds have attracted $3.4bn,” said BlackRock. [ETF Inflows Surge Despite Government Antics]

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