ETF Flows (week ending 6/2/16)
International overtakes US Equities and adds another +$3.6B inflows last week. US flows were positive +$1.3B, but trailed Intl again. Fixed Income ETFs saw higher activity and posted +$4.6B inflows. I provide a breakdown of Fixed Income below.
Again will start with International because that was where the Equity money is flowing into. In fact, over the last 7 weeks, there has only been 2 where US Equities had higher inflows than International. So, analyzing the International flows shows the money is going into the same places… Developed, Emerging, and Europe. In Developed International ETFs, it was the same usual suspects, EFA +$685M, VEA +$551M, IEFA +$151M. Emerging Markets posted +$1.4B inflows with IEMG +$364M and VWO +$206M. Europe continues to be hot and posted +$646M inflows last week with VGK +$341M, FEZ +$149M, and EZU +$138M. Note Europe ETFs saw +$4.7B inflows on the month of May. South Korea was also on the list as EWY posted a +$223M inflow last week. Japan led outflows last week with -$197M.
In the US, sector flows could be categorized as “Defensive”. Consumer Staples led inflows as XLP posted a +$401M inflow. A couple other Staples ETFs also inflows IYK +$61M and VDC +$37M. Materials / Gold Miners were next on the inflow list, GDX +$215M, and XLB +$97M. On the outflow side, Financials led with XLF -$266 and KRE -$123M. Note Financials saw -$1.2B in outflows in May. REITs also saw big outflows last week (something we have not seen in a while), with IYR -$304M, VNQ -$158M, and DRN -$54M. Energy also aw outflows of -$305M with XLE -$250M.
As mentioned above Fixed Income (FI) ETFs posted +$4.6B of inflows last week. Again, interesting the groups within FI that saw inflows. LQD (Inv Grade Bonds) actually saw the highest inflow of any ETF last week with +$1.1B. EMB, the International Bond ETF also saw +$603M of inflows. High Yield Bonds ETFs posted inflows as JNK +$690M, SJNK +$219M, and HYG +$89M. Next Treasury ETFs saw inflows with TLT (+20yr) +$565M, IEI (3-7yr) +$398M. However IEF (7-10yr) saw -$323M in outflows and SHV (short term) -$77M. Finally, Gold ETFs posted inflows last week, GLD +$149M and IAU +$64M.