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ETF Annual Inflow Record About To Be Broken

Cinthia Murphy

Only seven months into the year, and U.S.-listed ETFs have already attracted roughly $274 billion in net creations.

That number is quickly reaching what currently stands as the industry’s all-time annual inflow record of $287.5 billion, which was notched last year. And we still have five months to go before the year is over.

Broadly speaking, the quickening pace of ETF adoption has been linked primarily to the advisory community, which is increasingly turning to ETFs for their low cost and ease of use in an era marked by lower returns and new regulations, such as the Department of Labor’s fiduciary rule, now in effect.

ETFs, The Go-To Vehicle

Also driving ETF adoption is active managers’ growing use of beta, as well as institutional investors’ demand for ETFs for tactical allocation, risk management and cash equitization purposes. In all, every segment of the investing community seems to be increasingly turning to ETFs, helping fuel the industry as a whole.

In the month of July, investors poured some $24.6 billion in fresh net assets into ETFs, half of which landed into U.S. fixed-income funds. Among the most popular were strategies like the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and the iShares Core U.S. Aggregate Bond ETF (AGG).

New this past month was a return of junk bond funds to the top 10 creations. The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) had been bleeding assets in 2017, with HYG a net loser of $1.7 billion and JNK seeing net outflows of $741 million in the six months between January and June. But in July, these funds gathered a combined $2 billion each in net creations, making them some of the most popular funds last month.

Int’l Equity ETFs Still In High Demand

What hasn’t changed is the ongoing appetite for international equity exposure, which continues unabated this year. Another $10 billion landed into ETFs such as the iShares Core MSCI EAFE ETF (IEFA), the Vanguard FTSE Developed Markets ETF (VEA) and the iShares Core MSCI Emerging Markets ETF (IEMG) in July.

So far in 2017, international equities have attracted more than $103 billion in net assets—the most in-demand asset class this year, as investors look for developed non-U.S. and emerging markets to outperform U.S. stocks.

Chart courtesy of StockCharts.com

 

Still, the most popular ETF year-to-date remains the iShares Core S&P 500 ETF (IVV), which has now gathered a whopping $21.0 billion in seven months. The fund’s cheap expense ratio of 0.04%, and tight trading spreads averaging a penny, have helped fuel its strong demand among investors looking for U.S. large-cap equity exposure.

U.S. stocks may not be an investor favorite in the equity universe so far this year, but demand for U.S. equity funds was on the rise in July, when nearly $6 billion landed into U.S. stock ETFs.

IVV today is the second-largest ETF in the market, with $122 billion in total assets—second only to the SPDR S&P 500 (SPY), which has $242 billion in assets, and costs 0.09% in expense ratio.

What was not popular last month was U.S. small-cap stocks and gold. The iShares Russell 2000 ETF (IWM) and the SPDR Gold Trust (GLD) top redemptions in July, with net outflows of $2.7 billion and $2.4 billion, respectively. Year-to-date, these funds have bled a combined $5.9 billion in net assets.

The ETF industry ended July with $3.059 trillion in total assets. 

 

Top Gainers (July 2017)

Ticker Name Issuer Net Flows ($,mm) AUM ($M) % of AUM YTD 2017 Net Flows($,M)
IVV iShares Core S&P 500 ETF BlackRock 4,044.19 121,996.09 3.43% 21,046.38
IEFA iShares Core MSCI EAFE ETF BlackRock 3,882.22 33,037.20 13.32% 13,981.07
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF BlackRock 1,578.26 37,767.59 4.36% 9,628.48
VEA Vanguard FTSE Developed Markets ETF Vanguard 1,366.62 58,531.08 2.39% 11,210.89
HYG iShares iBoxx $ High Yield Corporate Bond ETF BlackRock 1,247.58 18,928.14 7.06% -479.13
XLF Financial Select Sector SPDR Fund State Street Global Advisors 1,235.99 25,777.44 5.04% 1,787.89
SPY SPDR S&P 500 ETF Trust State Street Global Advisors 1,016.50 242,717.62 0.42% -5,144.05
AGG iShares Core U.S. Aggregate Bond ETF BlackRock 1,004.27 48,534.69 2.11% 6,332.44
IEMG iShares Core MSCI Emerging Markets ETF BlackRock 839.91 35,064.69 2.45% 11,822.41
JNK SPDR Bloomberg Barclays High Yield Bond ETF State Street Global Advisors 814.28 12,364.77 7.05% 72.39

 

Top Gainers (Year-to-Date)

Ticker Name Issuer Net Flows ($,mm) AUM ($M) % of AUM July 2017 Net Flows($,M)
IVV iShares Core S&P 500 ETF BlackRock 21,046.38 121,996.09 20.85% 4,044.19
IEFA iShares Core MSCI EAFE ETF BlackRock 13,981.07 33,037.20 73.37% 3,882.22
IEMG iShares Core MSCI Emerging Markets ETF BlackRock 11,822.41 35,064.69 50.87% 839.91
VEA Vanguard FTSE Developed Markets ETF Vanguard 11,210.89 58,531.08 23.69% 1,366.62
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF BlackRock 9,628.48 37,767.59 34.22% 1,578.26
EFA iShares MSCI EAFE ETF BlackRock 9,481.25 78,482.97 13.74% 0.00
VOO Vanguard S&P 500 ETF Vanguard 8,803.76 71,720.84 13.99% 91.82
AGG iShares Core U.S. Aggregate Bond ETF BlackRock 6,332.44 48,534.69 15.00% 1,004.27
VWO Vanguard FTSE Emerging Markets ETF Vanguard 6,125.75 59,174.54 11.55% 660.41
VCIT Vanguard Intermediate-Term Corporate Bond ETF Vanguard 5,180.58 15,874.02 48.45% 550.79

 

Biggest Losers (July 2017)

Ticker Name Issuer Net Flows ($,mm) AUM ($M) % of AUM YTD 2017 Net Flows($,M)
IWM iShares Russell 2000 ETF BlackRock -2,711.20 35,260.30 -7.14% -4,861.75
GLD SPDR Gold Trust State Street Global Advisors -2,404.16 32,193.87 -6.95% -1,072.91
QQQ PowerShares QQQ Trust Invesco PowerShares -1,425.89 50,578.36 -2.74% -131.58
DBEF Deutsche X-trackers MSCI EAFE Hedged Equity ETF Deutsche Bank -1,389.12 7,199.77 -16.17% -1,159.19
EWJ iShares MSCI Japan ETF BlackRock -1,089.57 16,528.93 -6.18% -337.21
EMB iShares JP Morgan USD Emerging Markets Bond ETF BlackRock -896.06 11,849.53 -7.03% 3,544.19
GDX VanEck Vectors Gold Miners ETF VanEck -882.77 7,556.45 -10.46% -2,894.99
USO United States Oil Fund LP US Commodity Funds -847.27 2,571.33 -24.78% -227.02
IJH iShares Core S&P Mid-Cap ETF BlackRock -764.34 39,660.39 -1.89% 2,676.79
IYR iShares U.S. Real Estate ETF BlackRock -618.20 4,203.05 -12.82% -218.38

 

Biggest Losers (Year-to-Date)

Ticker Name Issuer Net Flows ($,mm) AUM ($M) % of AUM July 2017 Net Flows($,M)
SPY SPDR S&P 500 ETF Trust State Street Global Advisors -5,144.05 242,717.62 -2.08% 1,016.50
IWM iShares Russell 2000 ETF BlackRock -4,861.75 35,260.30 -12.12% -2,711.20
GDX VanEck Vectors Gold Miners ETF VanEck -2,894.99 7,556.45 -27.70% -882.77
IWF iShares Russell 1000 Growth ETF BlackRock -1,469.39 36,130.39 -3.91% -178.28
DBEF Deutsche X-trackers MSCI EAFE Hedged Equity ETF Deutsche Bank -1,159.19 7,199.77 -13.87% -1,389.12
FXN First Trust Energy AlphaDEX Fund First Trust -1,111.36 250.46 -81.61% -20.14
GLD SPDR Gold Trust State Street Global Advisors -1,072.91 32,193.87 -3.23% -2,404.16
HEDJ WisdomTree Europe Hedged Equity Fund WisdomTree -826.35 9,165.93 -8.27% -185.21
EWW iShares MSCI Mexico Capped ETF BlackRock -767.96 1,399.47 -35.43% 35.80
DVY iShares Select Dividend ETF BlackRock -659.24 16,982.41 -3.74% -115.85

 

Asset Classes (July 2017)

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 5,898.13 1,699,803.77 0.34%
International Equity 9,952.86 698,339.71 1.43%
U.S. Fixed Income 12,155.15 490,933.40 2.48%
International Fixed Income 117.24 51,293.61 0.25%
Commodities -3,138.36 61,744.36 -5.08%
Currency -94.46 1,399.63 -6.75%
Leveraged -757.48 28,699.58 -2.80%
Inverse 66.57 16,367.73 1.32%
Asset Allocation 118.62 7,403.20 1.60%
Alternatives 311.96 3,992.92 7.69%
Total: 24,630.30 3,059,977.90 0.81%

 

Asset Classes (Year-to-Date)

  Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 85,224.41 1,699,803.77 5.00%
International Equity 103,791.65 698,339.71 14.87%
U.S. Fixed Income 71,314.37 490,933.40 14.55%
International Fixed Income 11,135.02 51,293.61 21.27%
Commodities -1,334.13 61,744.36 -2.15%
Currency -90.06 1,399.63 -6.43%
Leveraged 1,684.13 28,699.58 5.71%
Inverse 976.19 16,367.73 6.84%
Asset Allocation 193.57 7,403.20 2.61%
Alternatives 889.83 3,992.92 22.16%
Total: 273,784.97 3,059,977.90 8.95%

 

July 2017 League Table

Issuer Net Flows ($,M) AUM ($,M) % of AUM YTD 2017 Net Flows($,M)
BlackRock $13,804.77  $1,210,014,835,018  1.14% $131,613.32
Vanguard $8,134.80  $757,622,268,715  1.07% $85,509.64
SSGA $1,280.31  $550,818,175,745  0.23% $7,078.28
Invesco PowerShares -$921.69  $126,765,237,090  -0.73% $4,904.41
Charles Schwab $1,822.58  $81,603,875,311  2.23% $15,414.34
First Trust $326.56  $49,965,234,099  0.65% $4,867.16
WisdomTree $88.74  $43,983,298,766  0.20% $710.32
Guggenheim $255.01  $36,727,033,662  0.69% $2,718.96
VanEck -$312.74  $31,295,017,739  -1.00% $112.91
ProShares -$408.27  $27,990,205,311  -1.46% $1,914.74
ALPS $27.01  $14,252,944,623  0.19% $1,630.81
Northern Trust $35.64  $14,290,392,001  0.25% $1,796.10
PIMCO $181.32  $14,025,272,760  1.29% $1,381.86
Deutsche Bank -$1,508.03  $13,272,920,901  -11.36% -$1,259.80
Direxion -$256.24  $11,199,874,899  -2.29% $200.26
UBS $80.05  $7,270,457,361  1.10% $211.47
Fidelity $239.03  $7,218,519,790  3.31% $1,504.54
Barclays Capital $228.27  $6,672,379,754  3.42% $421.71
Global X $240.63  $5,794,227,252  4.15% $1,620.94
JPMorgan $127.58  $5,557,191,605  2.30% $676.59
Goldman Sachs $655.42  $5,307,226,825  12.35% $1,934.38
Credit Suisse $208.47  $4,268,824,410  4.88% $1,203.47
US Commodity Funds -$887.89  $3,809,858,804  -23.31% -$312.30
Exchange Traded Concepts $174.35  $3,481,849,355  5.01% $1,001.81
IndexIQ $125.22  $2,854,640,315  4.39% $467.95
ETF Securities $45.13  $2,518,550,674  1.79% $191.26
OppenheimerFunds $25.42  $2,237,818,371  1.14% $577.03
Victory Capital Management $100.72  $1,697,546,900  5.93% $684.14
ETF Managers Group $54.72  $1,483,721,420  3.69% $485.52
Columbia $25.42  $1,256,492,194  2.02% $134.52
AdvisorShares $16.07  $1,090,590,964  1.47% $28.27
Pacer Financial $30.01  $1,077,928,500  2.78% $250.09
The Principal Financial Group $2.07  $1,062,507,577  0.19% $451.12
Millington Securities Inc $7.28  $1,003,983,000  0.73% -$74.68
Virtus $20.92  $976,257,661  2.14% $399.60
KraneShares $104.21  $935,871,273  11.14% $513.58
John Hancock -$13.38  $838,676,065  -1.60% $111.33
CitiGroup -$169.85  $832,451,045  -20.40% $448.35
Franklin ETF Trust $63.46  $811,247,891  7.82% $214.95
Cambria $10.23  $569,443,520  1.80% $190.01
Highland Capital Management $3.54  $564,512,622  0.63% $92.44
FQF Trust $5.39  $546,701,943  0.99% $76.26
Legg Mason $284.58  $538,461,218  52.85% $375.89
Northern Lights $43.95  $424,735,000  10.35% $276.59
Swedish Export Credit $17.57  $330,906,810  5.31% -$22.97
ARK $47.42  $282,016,545  16.81% $179.76
Hartford $21.05  $240,891,065  8.74% $75.57
Alpha Architect $4.08  $229,269,000  1.78% $72.76
Janus Henderson $13.36  $229,531,923  5.82% $90.81
Horizons $35.77  $205,963,000  17.37% $52.75
Davis $13.10  $180,949,160  7.24% $135.98
Elkhorn $1.52  $166,958,090  0.91% $27.59
Arrow Investment Advisors -$0.72  $167,346,750  -0.43% $54.49
Nuveen $3.76  $162,626,440  2.31% $20.40
Teucrium -$14.08  $148,720,772  -9.47% -$11.53
Merk $0.09  $129,380,427  0.07% $5.57
US Global Investors $7.01  $119,679,000  5.86% $50.00
Amplify $25.59  $104,957,500  24.38% $84.12
Montage Managers $2.35  $82,287,000  2.86% $26.47
Morgan Stanley $0.00  $78,190,559  0.00% -$16.14
Reality Shares $1.68  $71,777,340  2.34% $24.05
OSI ETF Trust $6.43  $57,205,690  11.24% $50.80
ClearShares $26.32  $53,277,000  49.40% $49.95
Academy Funds $2.94  $49,402,000  5.95% $5.81
BMO $0.00  $49,042,963  0.00% $0.00
Aptus Capital Advisors -$0.01  $32,476,000  -0.03% $3.92
Strategy Shares $3.85  $34,720,631  11.09% $15.08
TrimTabs Asset Management $2.74  $31,405,750  8.72% $23.94
ACSI Funds $3.60  $31,234,500  11.53% $16.31
AlphaMark Advisors $0.00  $27,280,000  0.00% $0.00
Janus $2.90  $24,738,430  11.72% $10.88
Validea Capital Management $0.00  $24,381,000  0.00% $1.36
Diamond Hill -$1.46  $17,496,000  -8.34% -$1.56
Renaissance Capital $0.00  $16,409,617  0.00% -$1.16
Natixis $0.00  $15,683,010  0.00% $0.00
Premise Capital $1.42  $12,784,500  11.11% $6.78
CSOP $0.00  $8,688,966  0.00% -$1.42
LocalShares $0.00  $8,344,663  0.00% $0.00
StrongVest $0.00  $6,302,500  0.00% $5.02
GraniteShares $1.23  $6,310,410  19.49% $1.25
USCF Advisers $0.00  $4,939,067  0.00% -$0.83
SerenityShares $0.00  $2,632,000  0.00% $0.01
AlphaClone $0.00  $2,438,000  0.00% -$0.99

Disclaimer: All data as of 6 a.m. Eastern time the date the article is published. Data is believed to be accurate; however, transient market data is often subject to subsequent revision and correction by the exchanges.

 

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