U.S. ETFs Attract $53 Billion in First Quarter: Morningstar
April 12th at 1:23pm by Tom Lydon
U.S.-listed exchange traded funds have tallied another $50 billion growth spurt in the first quarter as broad stock indices strengthened and broke records.
In March, investors funneled $16.9 billion into ETFs, lifting first-quarter total asset inflows to $53.1 billion, writes ETF analyst Micahel Rawson for Morningstar. U.S.-listed ETFs have gathered over $50 billion in four of the past five quarters.
U.S.-stock related funds topped the inflows over March, bringing in $11.2 billion. Bond ETFs still attracted investment interest with an additional $4.8 billion. On the flip side, international stocks saw $2.7 billion in outflows and commodities lost $2.4 billion.
Over the first quarter, U.S.-stock ETFs attracted $16.4 and bond ETFs, international stock ETFs added $16.0 and bond ETFs brought in $8.3 billion. Commodities, though, saw $6.9 billion in outflows.
Among U.S. stock ETFs, Morningstar found large value and small blend themes attracted strong inflows for the quarter, including iShares MSCI USA Minimum Volatility (NYSEArca: USMV), which had inflows of $1.7 billion, and iShares Russell 2000 Index (NYSEArca: IWM), which attracted $3.4 billion. Dividend ETFs also attracted heavy interest, with Vanguard Dividend Appreciation ETF (NYSEArca: VIG) bringing in $1.2 billion. However, PowerShares QQQ (NasdaqGM: QQQ) saw $1.1 billion in outflows.
Short-duration bond and bank loans were popular themes within the fixed-income space over the first quarter. For instance, Vanguard Short-Term Bond ETF (NYSEArca: BSV) brought in $2.2 billion and the PowerShares Senior Loan Portfolio (NYSEArca: BKLN) expanded by $1.5 billion. Meanwhile, intermediate- and long-term bonds saw outflows, including iShares Barclays TIPS Bond (NYSEArca: TIP), which lost $1.5 billion, and iShares iBoxx $ Investment Grade Coroporate Bond (NYSEArca: LQD), which contracted by $1.4 billion.
Investors also funneled $2.7 billion into alternative ETF strategies, with inverse equity ETFs and volatility-linked funds making a comeback.
The WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) saw the largest inflows over the quarter, garnering $3.9 billion in assets. The SPDR S&P 500 (NYSEArca: SPY) saw the highest redemptions, losing $8.1 billion in assets.
The so-called fee war seems to be working out for providers that have aggressively slashed fees. For instance, while the SPY ETF saw outflows, the cheaper iShares Core S&P 500 ETF (NYSEArca: IVV) added $2.3 billion and the Vanguard S&P 500 ETF (NYSEArca: VOO) saw $1.5 billion in new assets. Looking at fund providers, iShares attracted $17.6 billion in new assets over the first quarter and Vanguard saw $19.7 in new inflows. In comparison, State Street Global Advisors lost $6.4 billion over the quarter.
Globally, the ETF industry saw record quarterly inflows, fueled by developed market equity demand. [Developed Market Equity Demand Fuels Record Quarterly ETF Inflows]
For more information on ETF asset flows, visit our ETF performance reports category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own SPY, TIP, LQD, QQQ, BSV and IWW.
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