June 1, 2018

Equity ETFs Attract Net New Money for Eight Consecutive Weeks

by Patrick Keon.

The equity ETF asset group had positive flows of $4.3 billion for the Thomson Reuters Lipper’s fund-flows week ended Wednesday, May 30, 2018. It marked the group’s eighth straight weekly net inflow during which time it has grown its coffers by $35.2 billion and extended their year to date intake to $67.9 billion. This 8-week stretch represents a bit of a resurgence for the group.  In the two month run-up prior to the current streak equity ETFs had suffered total net outflows of $39.7 billion, these results mirrored the volatility seen in the equity markets during this time as the Dow Jones Industrial Average shed almost 1900 points, or 7.2%.

Interestingly equity ETFs provide a different point of view in regards to region allocation than equity mutual funds do.  For equity mutual funds the year to date data shows all of the net inflows going to nondomestic products (+$54.9 billion) while domestic funds have had net outflows (-$28.5 billion). Conversely, equity ETFs have had net-positive flows to both nondomestic (+$32.1 billion) and domestic (+$35.8 billion). At the peer group level the major contributors to overall net inflows for the year are split between domestic and nondomestic products as the aggregate data is.  The largest net-positive flows belong to nondomestic fund classifications (International Multi-Cap Core Funds and Emerging Markets Funds took in +$18.5 billion and +$11.7 billion, respectively) while the next two largest are attributable to domestic peer groups (Large-Cap Growth Funds (+$11.0 billion) and Science and Technology Funds (+$7.3 billion)).

Taking a more granular look, the individual equity ETFs with the most significant positive flows this year are: iShares Core MSCI EAFE ETF (IEFA, +$16.2 billion), iShares Core MSCI Emerging Markets ETF (IEMG, +$7.9 billion), iShares Core S&P 500 ETF (IVV, +$2.7 billion), iShares MSCI Emerging Markets ETF (EEM, +$2.5 billion), and iShares Edge MSCI USA Momentum Factor ETF (MTUM, +$2.1 billion).


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