3. Gold/Precious Metals/Commodity funds still sloppy. The large outflows from these former market-leading assets occurred in the first half of the year with $22 billion in redemptions. Q3 is smaller – just $1.2 billion in commodity fund outflows. Gold funds are the drivers of these results. Note to the Federal Reserve: deflation is still a real threat, at least in the eyes of the ETF world.
4. Inverse Leverage ETFs show remarkable resilience. For the QTD, flows into these products total $1.7 billion, led by products which short small cap stocks, crude oil, the S&P 500, gold mining stocks, and NASDAQ names.
5. That said, straight-up exposure is still the overwhelming driver of ETF flows. Drilling down one decimal point, unlevered ETFs of all stripes (bonds, stocks, commodities, etc.) have drawn $57.7 billion of the total $58.7 billion in ETF flows this quarter.
6. The hot sectors this quarter were Basic Materials, Technology and Health Care, each with over $2 billion of fresh money.
7. On the not-so-hot side, financials and energy are losing traction with ETF investors after a strong first half. Financials: $1.6 billion QTD, almost $7 billion YTD. Energy: $1.2 billion QTD, $4.3 billion YRD>
8. Stone cold: Industrials, which only garnered $29 million in fresh capital this quarter after $1.5 billion of inflows in the first half. Left for dead: utilities, but that has been the case most of the year. Negative $65 million QTD and negative $129 million for all of 2013.
9. Actively managed funds – mostly fixed income at this point – continue to plow along raising small amounts of capital with $326 million for the quarter. This will – eventually – be the next large growth area of ETFs.
10. The final quarter is going to be bumpy. Not in our helpful table but still useful is the one-week ETF money flows: negative $89 million. It’s not unusual for ETFs to have down weeks for flows, of course. And in the context of the post-FOMC sell-off, such a small number doesn’t really indicate much. Over the last several years total ETF flows have run about $150-200 billion annually. By that measure there is still a remaining $20 – 70 billion left to show up between now and December 31st. How and when it comes will certainly have a say in whether we’ve seen the highs for stocks in 2013, or have one last hurrah.