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May 31, 2017

ETF Monthly (May’17) Review of ETF Flows – International Domination

International Equities stole the show in May with robust inflows of +$21.6B in the month of May.  It was quite the opposite for US Equities, they had a rare -$3.1B of outflows in May.  Fixed Income ETFs had +$9.7B of inflows in May.

Let’s start with International flows because that is essentially where the money went in May.  International Developed Markets (i.e. Europe, Japan, Australia, etc.) posted +$8.9B of inflows.  EFA (iShares MSCI EAFE ETF) by far and away saw the highest amount of inflows of any ETF in May at +$4.1B.  Next in Intl DM, IEFA (iShares Core MSCI EAFE ETF) posted +$1.9B inflows.  Emerging Market ETFs also added an impressive +$5.8B assets in May.  Highest inflows in EM were IEMG (iShares Core MSCI EM ETF) +$1.9B and VWO (Vanguard FTSE EM ETF) +$1.4B.

European ETFs posted a heavy +$4.7B inflows and including Germany specific ETFs that +$5.2B of inflows in May.  Note the outperformance of Europe in May: VGK +4.9% vs SPY +1.4%.   ETFs that led the inflows were VGK (Vanguard FTSE Europe ETF) +$1.8B and EZU (iShares MSCI Eurozone ETF) +$1.7B.

 

In the US, Small Cap ETFs saw large outflows with IWM (iShares Russell 2000 ETF) seeing -$4.3B outflows, decreasing IWM’s fund size by 11.1%.  Note IWM fell 2% in May and trailed US Large Caps by 3.4%.  Other areas seeing large outflows were the Gold Miners with GDX (VanEck Vectors Gold Miners ETF) -$1.4B and GDXJ (VanEck Vectors Junior Gold Miners ETF) -$0.4B.  Other Material ETFs that saw outflows were NUGT, XLB, and XME.  Financials also saw a good deal of outflows in May totaling -$1.2B.  XLF (Financial Select Sector SPDR Fund) saw -$754M and KRE (SPDR S&P Regional Banking ETF) -$345M.

On the inflow side, Tech led with +$1.1B.  These inflows were spread out with 5 ETFs (IGV, SMH, VGT, KWEB, and ROBO) having inflows between $100M – $220M.  Cons. Discr. posted +$506M inflows with XLY (Cons. Discr. Sector SPDR) posting +$260M.

As mentioned above, Fixed Income (FI) ETFs posted +$9.7B inflows in May.  LQD (Shares iBoxx $ Inv. Grade Corp. Bond) saw the largest bond inflow of +$2.2B.  Next, AGG (iShares Core U.S. Aggregate Bond ETF) posted +$801M, EMB (iShares J.P. Morgan USD EM Bond ETF) +$786M, and IEI (iShares 3-7 Year T Bond ETF) +$608M.

 

 

 

 

 

 

 

 

 

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About Christian Fromhertz
Christian Fromhertz is the founder & CEO of The Tribeca Trade Group.

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