This week’s ETF flows saw a strong performance from bond ETFs, but nothing like this – bonds added nearly $5.2 billion in just one week as investors flocked to yields so strong that some are even suggesting inverting the 60/40 portfolio. With the Fed set for further rate hikes, there could be even more yield to harvest in the weeks and months ahead.
| Asset Class | AUM ($, mm) | Net Flows ($, mm) |
|---|---|---|
| Bond | $1,316,773.01 | $5,190.16 |
| Commodity | $138,118.26 | $851.87 |
| Equity | $5,244,506.21 | $90.50 |
| Volatility | $2,937.38 | $68.19 |
| Currency | $4,066.08 | $7.09 |
| Preferred Stock | $32,542.35 | -$43.55 |
| Alternatives | $5,743.70 | -$48.19 |
| Real Estate | $73,544.76 | -$170.74 |
| Multi-Asset | $32,188.78 | -$498.78 |
That’s been a boon for some of the biggest brand name ETF houses, though according to VettaFi it was Schwab’s Schwab Short-Term U.S. Treasury ETF (SCHO) that has led in one-week net inflows with $2.3 billion in net inflows for the week. Other notable names include the Vanguard Total International Bond ETF (BNDX) and the iShares U.S. Treasury Bond ETF (GOVT) to round out the top three bond ETFs with $1.3 billion and $844 million in net inflows over one week according to VettaFi.
Perhaps more surprisingly, though, was commodities’ ability to outdo equities in flows, the latter category almost dipped into outflows over the last week with -$2.3 billion leaving the Invesco QQQ Trust (QQQ). Commodities bounced thanks to strong incoming assets for the iShares Silver Trust (SLV) and the SPDR Gold Shares ETF (GLD) which added $503 million and $393 million respectively over one week.
The pickup for silver and gold may be due in part to dropping pressure from real yields, with the 10-year TIPS yield having recently dropped back down to 1.2%. Indeed, it may also speak to the ongoing effort by the markets to almost “will” the Fed to pump the brakes on rate hikes. Whatever the cause, commodities had a strong flow week and easily eclipsed equities inflows overall, $852 million to just $91 million for equities.
One bright spot for equities, though, is somewhat surprisingly found in Europe, with the JPMorgan BetaBuilders Europe ETF (BBEU) adding $2.1 billion over the week, the most among equities ETFs in that time according to VettaFi.
For more news, information, and analysis, visit VettaFi | ETF Trends.