Tag Archives: nysearcadbef

Investors Favor Equity ETFs In 2015

By Patrick Keon Positive net flows into equity exchange-traded funds (ETFs) (+$55.5 billion) have far outweighed those into equity mutual funds (+$6.9 billion) for the year to date. Investors putting more net new money into equity ETFs as opposed to equity mutual funds has been true for every year except one (2013) since the global financial crisis. What jumps out about this year’s fund flows activity for equity ETFs is that nondomestic equity ETFs have dominated equity ETFs. Nondomestic equity ETFs have grown their coffers by almost $64 billion so far for 2015, while domestic equity ETFs have seen over $8 billion leave. If this trend holds through year-end, 2015 will be the first year since 2010 that nondomestic equity funds have had more net inflows than domestic ones. Nondomestic barely nudged out domestic for most net inflows for 2010 (+$34.0 billion versus +$33.7 billion), while the roughly $70-billion spread for this year would be by far the highest annual difference between the two groups for the 20 years Lipper has been tracking the data. It stands to reason then that nine of the ten largest net inflows among equity ETFs this year have been for nondomestic products. These nine ETFs are split up between MSCI EAFE (4), Europe (3), and Japan (2) products. The MSCI EAFE ETFs have taken in the most net new money (+$24.3 billion) of the three groups, followed closely by Europe ETFs (+$21.6 billion), with the Japan products recording more-modest gains (+$8.5 billion). The single largest positive net inflows belong to Deutsche X-trackers MSCI EAFE Hedged Equity ETF ( DBEF , +$12.9 billion). Conversely, the largest equity ETFs are two S&P 500 Index products: SPDR S&P 500 ETF Trust ( SPY , $168.0 billion of assets under management) and iShares Core S&P 500 ETF ( IVV , $63.8 billion of assets under management); each has seen money leave this year. SPY has had net outflows of almost $36 billion for YTD 2015, while IVV is down $1.1 billion.

Lipper Fund Flows: Money Markets Gain While China Surprises

Lipper’s fund macro-groups (including both mutual funds and exchange-traded funds) had aggregate net inflows of $4.9 billion for the fund-flows week ended Wednesday, August 12. This marked the second consecutive week of overall positive net flows and the fourth week in the past six. Every group except taxable bond funds (-$2.0 billion) took in net new money. Money market funds (+$6.0 billion) paced the groups in net inflows and were followed by equity funds (+$936 million) and municipal bond funds (+$11 million). In market activity, the Dow Jones Industrial Average closed down 0.79% (-137.96 points), while the S&P 500 Index retreated 0.66% (-13.79 points) on the week. It was a volatile week of trading, with the Dow experiencing three days of triple-digit moves (two down and one up) and another day that saw it recoup almost all of its more-than-270-point intraday loss to close the day down less than one point. A good deal of the market’s uncertainty was triggered by China’s surprise move to devalue its currency on two consecutive days (August 11 and 12). China made these moves in response to a string of recent economic data that indicated the world’s second largest economy is slowing. The first devaluation shook the U.S. equity markets, with the Dow and S&P 500 closing down 1.2% and 1.0%, respectively, in direct response to the news. After the second currency devaluation, the Dow and the S&P continued their descent from the previous day, but both bounced back to finish virtually unchanged. The market rebounded on speculation the Federal Reserve might push back its highly anticipated September interest rate hike in response to fears that China might devalue its currency further as well as on buying of some recently oversold issues (Apple, energy stocks). The $6.0 billion of net positive flows into money market funds represented their second consecutive week and the seventh of the last nine weeks of taking in net new money. This streak reduced the group’s net outflows for the year to date to $55.0 billion. Institutional money market funds were responsible for $11.2 billion of the group’s net inflows for the week. For equity funds, ETFs accounted for the bulk of the net inflows (+$646 million) for the week, while mutual funds benefited from $290 million of the positive flows. The two largest individual net inflows for ETFs belonged to Deutsche X-trackers MSCI EAFE Hedged Equity ETF ((NYSEARCA: DBEF ), +$562 million) and Utilities Select Sector SPDR Fund ((NYSEARCA: XLU ) , +$382 million ) . Following the trend we’ve seen for most of 2015 among mutual funds, nondomestic equity funds (+$1.1 billion) took in net new money for the week, while domestic equity funds (-$466 million) saw money leave their coffers. ETFs were responsible for the majority of the net outflows (-$1.3 billion) for taxable bond funds, while mutual funds saw $759 million leave. The data indicated investors were running away from high yield in both mutual funds and ETFs. iShares iBoxx $ High Yield Corporate Bond ETF ((NYSEARCA: HYG ), -$524 million) and SPDR Barclays High Yield Bond ETF ((NYSEARCA: JNK ) , -$305 million) saw the most money leave among ETFs, while Lipper’s Loan Participation Funds (-$567million) and High Yield Funds (-$254 million) classifications had the largest negative flows on the mutual fund side. Municipal bond mutual funds had net inflows of just over $11 million for the week. Funds in the national muni debt classifications (+$28 million) were the beneficiaries of the largest positive flows. Share this article with a colleague

Lipper Fund Flows: Domestic Equity Funds Take $2.4 Billion Dive

For the flows week ended August 5, investors watched the Dow Jones Industrial Average stumble through five straight days of losses. The week ended with an ADP report that said private employers added 185,000 jobs in July, well below estimates of 210,000 and suggesting a less-robust economic picture that might stave off a rate hike from the Federal Reserve. However, shortly afterward, the ISM index of service sector activity came in much stronger than expected for July, jumping from 56.3 points to 60.3 (anything over 50 indicates economic expansion). On Monday, the SPDR Select Sector Energy (NYSEARCA: XLE ) exchange-traded fund (ETF) fell 2% for a second straight day and by Wednesday was trading at prices last seen in August 2012. Equity mutual fund investors made net redemptions of $2.0 billion for the week and not surprisingly, they pulled money from domestic equity mutual funds (-$2.4 billion). Equity ETFs saw net outflows of $1.6 billion as investors pulled the plug on PowerShares QQQ ((NASDAQ: QQQ ), -$1.3 billion), SPDR S&P 500 ((NYSEARCA: SPY ), -$1.1 billion), and iShares Russell 2000 ((NYSEARCA: IWM ), -$808 million). The $14.2-billion Deutsche MSCI EAFE Hedged ((NYSEARCA: DBEF ), +$946 million) led the inflows list. Bond mutual fund investors, like their equity counterparts, took a risk-off attitude as they redeemed shares. Overall, taxable bond mutual funds saw net outflows of $1.2 billion for the week, while bond ETFs saw $454 million of net outflows. Funds in Lipper’s Loan Participation Funds (-$598 million) and High Yield Funds classifications (-$407 million) led category outflows. HY ETF investors redeemed a net $793 million for the week, while loan ETFs had flat activity. The week’s biggest ETF withdrawals occurred at iShares iBoxx $HY Corp ((NYSEARCA: HYG ), -$481 million) and iShares 20+ Treasury ((NYSEARCA: TLT ), -$169 million). Municipal bond mutual fund investors pulled $348 million from their accounts-for the thirteenth net outflow in the past 14 weeks. Money market funds saw net inflows of $20.3 billion, of which institutional investors added $15.5 billion and retail investors added $4.8 billion. Share this article with a colleague