ETF Asset Flow Of May: Foreign Wins, U.S. Loses

The month of May turned out to be eventful includingallegations against the U.S. President Trump related to his Russia links, political turmoil in Brazil, a global cyber-attack, extension of the OPEC output cut deal and France election (read: Best ETF Strategies for Trump Uncertainty).

All these events left their mark in the monthly ETF asset accumulation and redemption process. Let’s take a look at the corners that were the hot favorites of investors in May and those that were cast out. The data is as per etf.com till May 25, 2017.

Gainers

EAFE – iShares MSCI EAFE ETF (EFA)

As the Trump rally lost stream in the U.S. on political heating and the President’s alleged connections with Russia, investors turned their focus toward Europe, Australasia and the Far East. Notably, economic developments in this region is brightening gradually and investors did not miss any chance to cash in on it. Plus, several developed markets including the Euro zone and Japan are still enjoying the ultra-easy monetary policy and are thus poised to benefit.

EFA hauled in about $3.38 billion in the month while another EAFE-oriented fund iShares Core MSCI EAFE ETF (IEFA) attracted about $1.77 billion. Vanguard FTSE Developed Markets ETF (VEA) too grossed about $1.56 billion in assets in the said timeframe.

Corp. Bond –iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD)

As the broader equity market offered subdued returns in the month, investors poured about $1.99 billion in assets in the higher-yielding (than Treasuries) investment grade corporate bonds. Upbeat corporate earnings must have made investors confident about these bonds which offered great current income too.

Emerging Market – iShares Core MSCI Emerging Markets ETF (IEMG)

Emerging market stocks are on a tear lately. Improving economic growth, a certain level of stabilization in China, high-flying Indian stocks, series of rate cuts by many economies and still-subdued U.S. Treasury yield brightened demand for higher-yielding emerging market equities. The fund accumulated about $1.69 billion in assets. Vanguard FTSE Emerging Markets ETF (VWO) also attracted about $1.42 billion in assets in the month Should You Buy Brazil ETFs After Brutal Sell-Off?).

Losers

S&P 500 –SPDR S&P 500 ETF Trust ( (AX:SPY) )

Though Vanguard S&P 500 ETF (VOO) and iShares Core S&P 500 ETF (IVV) hasadded about $1.56 billion and $1.43 billion in the month, SPY (NYSE:SPY) has shed about $9.13 billion in assets. Investors probably discarded SPY due to its higher expense ratio than its two other counterparts.

Small-Cap – iShares Russell 2000 ETF (IWM)

Thanks to some weaker-than-expected economic data and political turmoil with Trump’s alleged links with Russia, chances of materialization of the President’s promised reforms moved a few steps back in the month. Probably this is why, IWM saw about $4.88 billion in assets gushing out (read: 7 Large-Cap Growth ETFs That Are Sizzling).

Dow Jones – SPDR Dow Jones Industrial Average (SI:SPDR) ETF Trust ( (V:DIA) )

Dow Jones is another beneficiary of the Trump bump. So DIA also saw about $1.11 billion in assets leaving it as the Trump rally wavered somewhat in the month.

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