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ETF Asset Flow for November

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Sanghamitra Saha
·4 min read
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U.S. stocks were super steady in November on back-to-back upbeat vaccine update. While Pfizer and Moderna already charged-up markets up with their success in COVID-19 vaccine clinical trials at the start of the month, AstraZeneca (AZN) said on Nov 23 that its vaccine, developed in collaboration with the University of Oxford, showed an average 70% effectiveness. Plus, Sanofi (SNY), GlaxoSmithKline's (GSK) and Johnson & Johnson (JNJ) are also working hard in the COVID-19 vaccine field.

This raised hopes of a return to normalcy sooner than expected. Moreover, chances of a divided Congress in the United States, which means status quo and the likelihood of no major policy changes in the medium term, aided the equity rally. The dual tailwinds led investors to rotate into the beaten-down segments of the year — cyclicals. Moreover, the month of November also saw renewed stimulus hopes.

Moreover, NRF noted last week that the retail sector has witnessed a V-shaped recovery as aggregate retail sales have grown both sequentially and year over year each month since June. For the first 10 months of this year, retail sales were up 6.4% versus the first 10 months of 2019, per NRF. Overall, the retail sector is expected to log a “strong finish” to 2020 despite COVID-19. Already, consumers did record online shopping during the Cyber Weekend.

As a result, the S&P 500 (up 10.8%), the Dow Jones (up 11.8%), the Nasdaq Composite (up 11.8%) and the Russell 2000 (up 18.3%) — all put up a great show last month. The Dow Jones logged its best month since 1987.

Industrials and Financials sectors clocked their best month since April 2009 while the energy sector as represented by the ETF XLE saw its second-best month ever. In this scenario, we highlight ETF asset flows for the month of November (per etf.com).

U.S. Stocks Win Across the Board: S&P 500, Small Caps, Total Market

There were risk-on sentiments globally in the month of November which showered asset gains on SPDR S&P 500 ETF Trust SPY (about $13.89 billion, Vanguard S&P 500 ETF (VOO) (about $2.56 billion) and iShares Core S&P 500 ETF (IVV) (about $2.23 billion).

Vaccine hopes, renewed bets over stimulus and Biden’s transition, in any case, will make the case for small-cap value investing stronger. iShares Russell 2000 ETF IWM (about $2.71 billion) and iShares Core S&P Small-Cap ETF (IJR) (about $1.75 billion) were thus prominent asset gainers(read: Why Is This the Right Time to Bet on Small-Cap Value ETFs?).

Total stock market ETFs like Vanguard Total Stock Market ETF VTI (asset gains of $5.27 billion) has also attracted assets in the month.

International Stocks in Sweet Spot Too

Vanguard Total International Stock ETF VXUS amassed about $2.65 billion in assets asglobal stocks had a record-breaking month in November. Emerging-market currencies logged their largest gains in almost two years.  Many European markets posted their best month ever, with France up 21% and Italy gaining almost 26%. The Nikkei’s 15% gain offered the index its best month since 1994, per Reuters.

High-Yield Corporate Bonds in Focus

iShares iBoxx USD High Yield Corporate Bond ETF HYG gained about $2.73 billion in assets in the month. The fund yields about 4.89% annually. Investors’ faith is probably coming back to the risky corporate bond segment with renewed risk-on sentiments.

Gold Loses Its Glitter

SPDR Gold Trust GLD lost about $3.76 billion in assets as this safe-haven asset fell out of favor in a charged-up month like November.

Treasuries Backtrack Too

iShares 7-10 Year Treasury Bond ETF IEF (by about $3.23 billion), iShares 20+ Year Treasury Bond ETF (TLT) (by about $1.76 billion), iShares 1-3 Year Treasury Bond ETF (SHY) (by $863 million), iShares Short Treasury Bond ETF (SHV) (by $1.02 billion) and SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) (by $640.7 million) have also trimmed assets in the month as the safe assets were out of favor in November.

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SPDR Gold Shares (GLD): ETF Research Reports
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
iShares iBoxx High Yield Corporate Bond ETF (HYG): ETF Research Reports
 
iShares Russell 2000 ETF (IWM): ETF Research Reports
 
iShares 710 Year Treasury Bond ETF (IEF): ETF Research Reports
 
Vanguard Total Stock Market ETF (VTI): ETF Research Reports
 
Vanguard Total International Stock ETF (VXUS): ETF Research Reports
 
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