May ETF Wrap Up
May ETF Wrap Up
Michael Cafiero – Vice President ETF Trading – Knight Capital Americas, L.P.
Knight ETF Trading: A turbulent market environment didn’t slow inflows in May as ETF/ETN net inflows totaled $63.1 billion. A continuation of significant inflows in to Fixed Income ETFs highlights overall ETF flows as we have seen throughout this year.
Flows: For the month of May 2012, Knight accounted for 16.1% of advertised ETF block shares traded trading in 1,176 unique ETFs. (Autex Block Data 6/1/12)
US Equity ETFs: As we have seen in the last 60 days or so, the sell side has led in overall broad based funds including SPY (SPDR S&P 500 ETF Trust), QQQ (Powershares QQQ NASDAQ 100), and IWM (iShares Russell 2000).
Fixed Income ETFs: The crowded High Yield trade has continued to see some net outflows of JNK (SDPDR Barclays Capital High Yield), and HYG (iShares IBOXX H/Y Corp Bond). This however doesn’t mean that Fixed Income ETF flows have softened. In the aggregate bond space BOND (PIMCO Total Return ETF), BND(Vanguard Total Bond Market), and AGG (iShares Barclays Aggregate) have all seen heavy inflows form the buy side. Perhaps some of the high yield sellers are shifting toward investment grade as we have seen strong flows into LQD (iShares iBOXX Inv Gr Corp Bond) as well as CSJ (iShares Barclays 1-3 Year Credit). Inflation woes may be on some minds as well as we have seen flows increase into TIPS. TIP (iShares Barclays TIP Bond Fund). Treasuries as they always seem to do this time of year have seen a spike across the board. IEI (iShares Barclays 3-7- Year), IEF (iShares Barclays 7-10 Year), TLT (iShares Barclays 20+ Year TR), and BIL (SPDR Barclays Capital 1-3 Month) all have seen heavy inflows in the last 30 days.
International ETFs: Certainly sellers have highlighted Emerging Market Flows seen in VWO (Vanguard MSCI Emerging Market) and EEM (iShares MSCI Emerging Market). Many of the broad regional international funds saw sellers as well including ACWI (iShares MSCI ACWI Index), EFA (iShares MSCI EAFE Index Fund) and BKF (iShares MSCI BRIC Index). Some of the specialty international ETFs have seen some further buy side flows including EFAV (iShares MSCI EAFE Min Vol), EDIV (SPDR S&P Emerging Markets Dividend ETF), and ACWV (iShares MSCI World Min Vol). Regarding single countries flows have moved into EWZ (iShares MSCI Brazil) and EWM (iShares MSCI Malaysia). Many countries saw outflows including RSX (Market Vectors Russia ETF), FXI (iShares FTSE China 25Index), and EWJ (iShares MSCI Japan Index Fund).
Currency and Commodity ETFs/ETNs: Overall selling in Metals seen in GLD (SPDR Gold Trust), IAU (iShares Gold Trust), and SLV (iShares Silver Trust). Two way flows seen in USO (United State Oil Fund) but more sellers in OIL (iPath Goldman Sachs Crude). More selling in commodity liked funds including JJT(iPath DJ_UBS Tine Sub Index TOT), JJS(iPath DJ-UBS Softs Sub Index), and BAL (iPath DJ-UBS Cotton Sub Index).
Sector ETFs: Regarding sector flows in the last several weeks we have seen buying in; XLP (Consumer Staples SPDR) and XRT(SPDR S&P Retail ETF). Sellers were moving out of; XLF (Financial Select Sector SPDR), XLE (Energy Select Sector SPDR), XLK (Technology Select Sector SPDR) and XLY (Consumer Discretionary Select).
Alternative/Specialty ETFs: Greater sell side flows in VIX funds including VXX (IPath S&P 500 VIX S/T FU ETN), TVIX (Velocity Shares 2X VIX Sh-Trm), and UVXY (ProShares Ultra VIX ST Futures). REIT Funds have seen some inflows from the buy side including; VNQ (Vanguard REIT ETF) and REZ (iShares FTSE NAREIT Resident).
You may reach Michael directly at mcafiero@knight.com
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