Not All Large ETFs Gathered Assets in 2017

iShares also benefitted from its partnership with the indices offered by the index division of S&P Global (SPGI 131 NR), as these ETFs incurred $17 billion of net inflows. iShares S&P 500 (IVV) was the most popular of the S&P 500 index ETFs, gathering $6.1 billion, ahead of the $4 billion for both Vanguard S&P 500 (VOO) and SPDR S&P 500 (SPY).

With $12 billion, Vanguard’s strongest first quarter inflows came from ETFs tied to a Bloomberg Barclays index. Despite bond yields falling after the Federal Reserve raised rates, short-term ETFs such as Vanguard Short-Term Corporate Bond Index Fund (VCSH) and Vanguard Short-Term Bond Index (BSV) were popular. The two ETFs, which each have an average duration below three years, pulled in a combined $4.1 billion.

In the first three months, Vanguard ETFs tied to a FTSE Russell index experienced $8.7 billion of net inflows, yet iShares ETFs connected to the same firm shed $463 million. Vanguard FTSE Developed Markets ETF (VEA), a peer to IEFA but with additional exposure to Canadian equities, gathered $4.3 billion. Meanwhile, iShares Russell 2000 (IWM), a peer to IJR but with a 15% lower weighted average market capitalization, had $1.4 billion in net outflows.

In addition to SPY, inflows into more narrowly focused Technology Select Sector SPDR (XLK) and SPDR S&P Regional Banking (KRE) helped the SSGA/S&P Dow Jones relationship gather $11 billion of new assets in the first quarter. Demand helped offset recent outflows for Materials Select Sector SPDR (XLB).

Outside of the three largest ETF providers, Schwab ETFs tied to S&P Dow Jones indices had a strong first quarter with $3 billion of new assets. Schwab US Large Cap ETF (SCHX) was the most popular of these with $720 million of net inflows. This ETF has a lower expense ratio than IVV, SPY and VOO, but also has a lower weighted average market capitalization due to additional and smaller companies not included in the S&P 500 index.

Todd Rosenbluth is Director of ETF & Mutual Fund Research at CFRA.