FUNDFLOWS INSIGHT REPORT LIPPER RESEARCH SERIES 31, 2019 Mutual Funds Attract Net New Money in January, While ETFs Suffer Net Redemptions For the second month in three, mutual fund investors were net purchasers of fund assets, injecting $36.9 billion into the conventional funds business for January. For the first month in four, fixed income funds (+$15.1 billion for January) witnessed net inflows, while for the first month in nine, investors were net purchasers of stock & mixed-asset funds (+$14.1 billion). Money market funds (+$7.7 billion) witnessed the smallest net inflows for the month. For the first month seven, authorized participants (APs) were net redeemers of ETFs, withdrawing $2.6 billion for January. APs were net redeemers of stock & mixed-asset ETFs (-$18.8 billion), but net purchasers of fixed income ETFs (+$16.2 billion). For the first month in ten, APs were net redeemers of U.S. Diversified Equity ETFs (-$18.5 billion for January). Mutual Funds Attract Net New Money in January, While ETFs Suffer Net Redemptions EXECUTIVE SUMMARY For the second month in three, investors were net purchasers of mutual fund assets, injecting $36.9 billion into the conventional funds business (excluding ETFs, which are reviewed in the section below) for January. Investors warmed to improved trade talks between the U.S. and China and more dovish Federal Reserve Board comments, pushing U.S. stocks to their best January returns in three decades. For the first month in four, the fixed income funds macro-group witnessed net inflows, taking in $15.1 billion for the month. And for the first month in nine, stock & mixedasset funds witnessed net inflows (+$14.1 billion) for January, their largest monthly net inflows since March 2015. Money market funds (+$7.7 billion), for their fourth consecutive month of inflows, took in the smallest net inflows of the three broadbased macro-groups in the open-end fund universe. TABLE 1 ESTIMATED NET FLOWS BY MAJOR FUND TYPES, 2019 VERSUS 2018 ($BIL) At the beginning of January, investors cheered better than expected December jobs data and dovish comments by Fed Chair Jerome Powell about future rate hikes and shrinkage of its balance sheet. The United States Department of Labor reported the U.S. economy added 312,000 jobs for December, swamping analyst expectations of 182,000. Investors also cheered news that U.S. and Chinese trade officials were meeting for the first time since the two countries leaders agreed to a 90-day trade truce. Stock & Mixed Equity Funds 14.1-115.4 Bond Funds 15.1-62.4 Money Market Funds 7.7 63.1 TOTAL 36.9-114.8 Toward month-end, President Donald Trump and congressional Democrats came to a surprise agreement to reopen the government until February 15. However, stocks showed limited reaction to the news. As many expected, the Fed took a dovish stance after its January two-day policy meeting. U.S. stocks rallied again after the Federal Reserve signaled interest rate hikes are on pause and the next policy move will depend on economic data. The central bank surprised many by indicating it will adjust its balance sheet reduction process if necessary, causing interest rates to decline significantly through the last day of the month. TABLE 2 ESTIMATED NET FLOWS OF MAJOR EQUITY FUND TYPES, 2019 VERSUS 2018 ($BIL) USDE Funds 6.1-31.3 Sector Equity Funds -0.3-10.3 World Equity Funds 6.2-38.5 Mixed-Asset Funds 3.8-23.1 Alternatives Funds -1.6-12.3 TOTAL 14.1-115.4 Authored by: TOM ROSEEN HEAD OF RESEARCH SERVICES LIPPER 1
EQUITY FUNDS UNITED STATES DIVERSIFIED EQUITY (USDE) FUNDS For the first month in nine, USDE Funds witnessed net inflows (+$6.1 billion for January). The primary attractors of assets in the 4x3-matrix subgroup for the month were Multi-Cap Core Funds (+$2.1 billion), Small-Cap Core Funds (+$894 million), Small-Cap Value Funds (+$831 million), and Large-Cap Core Funds (+$575 million). Investors gave a cold shoulder to growth-oriented funds (-$1.2 billion) and mid-cap funds (-$1.3 billion). Lipper s Multi-Cap Value Funds classification (-$1.3 billion) suffered the largest net redemptions of the macro-classification, bettered by Multi-Cap Growth Funds (-$957 million). For the second month in a row, the non-4x3-matrix subgroup experienced net inflows (+$5.6 billion for January), with S&P 500 Index Funds experiencing the largest net purchases (+$6.3 billion for January). For the threemonth period ended January 31, 2019, USDE Funds witnessed $46.1 billion in net redemptions. TABLE 3 ESTIMATED NET FLOWS OF 4X3-MATRIX USDE FUNDS, 2019 VERSUS 2018 ($BIL) VALUE CORE GROWTH Large-Cap 0.1 0.6-0.7 0.0-18.7 Multi-cap -1.3 2.1-1.0-0.2 2.9 Mid-Cap -0.6-0.9 0.3-1.3-7.4 Small-Cap 0.8 0.9 0.2 2.0-8.8 TOTAL -0.9 2.6-1.2 0.5-32.0 TABLE 4 ESTIMATED NET FLOWS OF OTHER USDE CLASSIFICATIONS, 2019 VERSUS 2018 ($BIL) Equity Leverage Funds 0.2-0.5 Equity Income Funds -0.8-3.8 Specialty Diversified Equity Funds -0.1-0.1 S&P 500 Index Funds 6.3 5.0 TOTAL 5.6 0.7 2
EQUITY FUNDS WORLD EQUITY FUNDS For the first month in four, investors were net purchasers of World Equity Funds, injecting $6.2 billion for the month. Also, for the first month in four, institutional world equity funds (including variable insurance products) witnessed net inflows (+$7.2 billion). No-load world equity funds also witnessed net inflows, taking in $1.8 billion, while loaded world equity funds suffered net redemptions (-$2.8 billion). For the nineteenth month in a row, Lipper s Global Diversified Equity Funds subgroup (-$1.1 billion for January) witnessed net outflows, while for the first month in four the International Diversified Equity Funds subgroup experienced net inflows taking in $5.2 billion for January. International Multi-Cap Core Funds (+$4.5 billion) remained at the top of the World Equity Funds macro-classification. Emerging Markets Funds, taking in $2.8 billion net, was the runner-up for the month, followed by Global Large-Cap Growth Funds (+$487 million). At the bottom of the pile, Global Large-Cap Core Funds witnessed the largest net redemptions (-$767 million), bettered by Global Multi-Cap Core Funds (-$617 million). The World Equity Funds macroclassification handed back a net $39.9 billion over the last three months. TABLE 5 ESTIMATED NET FLOWS OF GLOBAL DIVERSIFIED EQUITY FUNDS, 2019 VERSUS 2018 ($BIL) VALUE CORE GROWTH Large-Cap -0.2-0.8 0.5-0.4-3.5 Multi-Cap -0.5-0.6 0.0-1.1-3.6 Small-/Mid-Cap (No Style) 0.4 0.4-1.4 TOTAL (LARGE & MULTI) -0.6-0.9 0.5-1.1-8.5 TABLE 6 ESTIMATED NET FLOWS OF INTERNATIONAL DIVERSIFIED EQUITY FUNDS, 2019 VERSUS 2018 ($BIL) VALUE CORE GROWTH Large-Cap 0.0-0.2 0.5 0.2-9.6 Multi-Cap 0.0 4.5 0.0 4.5-6.2 Small-/Mid-Cap 0.3 0.2-0.1 0.4-3.4 TOTAL 0.3 4.6 0.4 5.2-19.2 TABLE 7 ESTIMATED NET FLOWS OF REMAINING WORLD EQUITY FUND CLASSIFICATIONS, 2019 VERSUS 2018 ($BIL) China Region Funds 0.1-0.1 Emerging Markets Funds 2.8-6.0 European Region Funds -0.2-1.0 Global Equity Income Funds -0.5-1.8 India Region Funds 0.0-0.1 International Equity Income Funds 0.1-0.5 Japanese Funds -0.3-0.3 Latin American Funds 0.0 0.0 Pacific Region Funds 0.0-0.3 Pacific ex-japan Funds 0.1-0.5 TOTAL 2.0-10.7 3
EQUITY FUNDS SECTOR EQUITY FUNDS For the twelfth month in a row, investors gave the Sector Equity Funds macro-classification a cold shoulder in January (although only to the tune of -$339 million net). Six of the 23 classifications in this group attracted net new money, with Health/Biotechnology Funds (+$555 million), Energy MLP Funds (+$413 million), and Commodities General Funds (+$197 million) taking in the largest amounts for January. The Natural Resources Funds classification suffered the largest net outflows of the group, handing back slightly more than $516 million for January, bettered by Real Estate Funds (-$272 million), Science & Technology Funds (-$246 million), and Global Health/ Biotechnology Funds (-$237 million). For the threemonth period, Sector Equity Funds witnessed $14.8 billion in net redemptions. TABLE 8 ESTIMATED NET FLOWS OF SECTOR EQUITY FUNDS, 2019 VERSUS 2018 ($BIL) Precious Metals Equity Funds 0.0-0.1 Basic Materials Funds 0.0-0.1 Consumer Goods Funds -0.1-0.1 Commodities Energy Funds - - Commodities General Funds 0.2-0.8 Commodities Specialty Funds - - Consumer Services Funds 0.0-0.2 Energy MLP Funds 0.4-1.4 Financial Services Funds -0.1-0.5 Global Financial Services Funds 0.0 0.0 Global Health/Biotechnology Funds -0.2-0.5 Global Infrastructure Funds 0.1-0.2 Global Natural Resources Funds 0.0-0.3 Global Real Estate Funds 0.1-1.1 Global Science/Technology Funds 0.0-0.6 Health/Biotechnology Funds 0.6-0.6 Industrials Funds -0.1-0.2 International Real Estate Funds 0.0-0.5 Natural Resources Funds -0.5-0.2 Real Estate Funds -0.3-1.5 Specialty/Miscellaneous Funds -0.1-0.1 Science &Technology Funds -0.2-1.3 Telecommunication Funds 0.1-0.1 Utility Funds -0.1 0.0 TOTAL -0.3-10.3 4
EQUITY FUNDS MIXED-ASSET FUNDS For the first month in ten, the Mixed-Asset Funds macro-classification witnessed net inflows, taking in $3.8 billion for January. Convertible Securities Funds and Flexible Portfolio Funds (not shown in the table below) handed back some $376 million and $1.7 billion, respectively, for the month. For the fourth month in five, the mixed-asset target date funds subgroup witnessed net inflows, attracting $8.2 billion for January, while the primarily broker-recommended mixed-asset target risk funds subgroup for the thirty-third consecutive month witnessed net outflows (-$2.3 billion for January). Six of the 16 classifications in the subgroups suffered net redemptions for the month, with Mixed- Asset Target Allocation Moderate Funds (-$2.0 billion) witnessing the largest net redemptions, bettered by Mixed-Asset Target Allocation Conservative Funds (-$597 million) and Mixed-Asset Target 2020 Funds (-$360 million). Mixed-Asset Target 2035 Funds (+$1.6 billion) attracted the largest net draw of the classifications, followed by Mixed-Asset Target 2025 Funds (+$1.4 billion). Over the last three months, Mixed-Asset Funds handed back some $27.7 billion net. ALTERNATIVES FUNDS For the eighth consecutive month, the Alternatives Funds macro-classification experienced net redemptions (-$1.6 billion for January) as Alternative Global Macro Funds (-$1.3 billion) and Alternative Long/Short Equity Funds (-$322 million) witnessed the largest net outflows of the macro-classification. Alternative Other Funds (+$359 million, a variable annuity classification) attracted the largest net inflows of the group, followed by Alternative Event Driven Funds (+$255 million). For the three-month period ended January 31, the Alternatives Funds macroclassification handed back $19.9 billion net. TABLE 9 ESTIMATED NET FLOWS OF TARGET DATE AND TARGET RISK FUNDS, 2019 VERSUS 2018 ($BIL) Mixed Asset Target 2010 Funds -0.2-0.2 Mixed Asset Target 2015 Funds -0.3-0.5 Mixed Asset Target 2020 Funds -0.4-2.2 Mixed Asset Target 2025 Funds 1.4-0.4 Mixed Asset Target 2030 Funds 1.3-0.1 Mixed Asset Target 2035 Funds 1.6 0.2 Mixed Asset Target 2040 Funds 1.1 0.2 Mixed Asset Target 2045 Funds 1.3 0.4 Mixed Asset Target 2050 Funds 1.1 0.5 Mixed Asset Target 2055+ Funds 1.3 0.8 Mixed Asset Target Today Funds -0.1-0.4 Mixed Asset Target Alloc Aggres Funds 0.1-0.6 Mixed Asset Target Alloc Conserv Funds -0.6-1.7 Mixed Asset Target Alloc Growth Funds 0.3-1.6 Mixed Asset Target Alloc Moderate Funds -2.0-6.8 Retirement Income 0.0 0.1 TOTAL 5.9-12.2 TABLE 10 ESTIMATED NET FLOWS OF ALTERNATIVES FUNDS, 2019 VERSUS 2018 ($BIL) Absolute Return Funds -0.1-1.0 Alternative Active Extension Funds -0.1-1.0 Alternative Equity Market Neutral Funds 0.1-0.1 Alternative Event Driven Funds 0.3 0.0 Alternative Global Macro Funds -1.3-3.7 Alternative Long/Short Equity Funds -0.3-2.7 Alternative Managed Futures Funds -0.3-1.4 Alternative Multi-Strategy Funds -0.1-1.1 Alternative Other Funds 0.4-1.2 Dedicated Short Bias Funds -0.2-0.1 TOTAL -1.6-12.3 5
FIXED INCOME FUNDS FIXED INCOME FUNDS As a result of dovish Fed comments, fund investors embraced bond funds for the first month in four, injecting a net $15.1 billion for January. On the taxable bond (nonmoney market) funds side (+$7.5 billion), 16 of Lipper s 28 classifications witnessed net inflows, while on the tax-exempt side (+$7.6 billion) all of the 20 classifications in the municipal bond funds universe saw net inflows. Investors padded the coffers of Core Bond Funds (+$6.2 billion), High Yield Funds (+$3.0 billion), and Ultra-Short Obligation Funds (+$2.5 billion). The Corporate Debt BBB-Rated Funds classification witnessed the largest net redemptions of the group, handing back $5.9 billion for January, bettered by Loan Participation Funds (-$4.0 billion), Core Plus Bond Funds (-$1.6 billion), and General U.S. Government Funds (-$1.1 billion). On the municipal bond funds side, Intermediate Municipal Debt Funds (+$2.4 billion) and High Yield Municipal Debt Funds (+$1.9 billion) witnessed the largest net inflows, while Other States Short/Intermediate Municipal Debt Funds (+$1.3 million) witnessed the smallest net inflows of the subgroup. The Fixed Income Funds macro-classification handed back a net $73.8 billion over the last three months. TABLE 11 ESTIMATED NET FLOWS OF MAJOR FIXED INCOME FUND TYPES, 2019 VERSUS 2018 ($BIL) TAXABLE MUNICIPAL Long-Term Bond -3.5 3.8 0.3-41.3 Short & Intermediate 11.0 3.8 14.8-21.1 Money Market 12.3-4.6 7.7 63.1 TOTAL 19.8 3.0 22.8 0.7 MONEY MARKET FUNDS For the fourth consecutive month, investors were net purchasers of the Money Market Funds macroclassification, injecting $7.7 billion for January. On the taxable side (+$12.3 billion), Institutional Money Market Funds (+$20.2 billion) and Money Market Instrument Funds (+$12.5 billion) took in the largest amounts of net new money of the subgroup, while Institutional U.S. Treasury Money Market Funds witnessed the largest net outflows for the month (-$17.8 billion). On the taxexempt side (-$4.6 billion), two of the five classifications witnessed net inflows Institutional Tax-Exempt Money Market Funds (+$1.4 billion) and New York Tax-Exempt Money Market Funds (+$46 million). Tax-Exempt Money Market Funds (-$5.3 billion) witnessed the largest net outflows of the tax-exempt money market fund classifications, followed by California Tax-Exempt Money Market Funds (-$0.5 billion). Over the last three months, the Money Market Funds macro-classification took in a net $173.6 billion. 6
FUNDFLOWS INSIGHT REPORT LIPPER RESEARCH SERIES 31, 2019 For the First Month in Seven, APs are Net Redeemers TABLE 1 ESTIMATED NET FLOWS BY MAJOR ETF TYPES, 2019 VERSUS 2018 ($BIL) ETF EXECUTIVE SUMMARY For the first month in seven, ETFs overall witnessed net outflows, handing back $2.6 billion for January their largest monthly net outflows since March 2018. Authorized participants (APs, those investors who actually create and redeem ETF shares) were net redeemers of stock & mixed-asset ETFs, removing $18.8 billion from equity ETF coffers. And for the third consecutive month, they were net purchasers of bond ETFs injecting $16.2 billion for January. APs were net sellers of three of the five equity-based ETF macro-classifications USDE ETFs (-$18.5 billion), Sector Equity ETFs (-$6.9 billion), and Mixed-Asset ETFs (-$738 million), while being net purchasers of World Equity ETFs (+$5.3 billion) and Alternatives ETFs (+$2.1 billion). Investors cheered a better-than-expected nonfarm payrolls report for December (312,000 new jobs versus the 182,000 estimated by economists), focusing on improving trade talks and a softer, gentler Fed. Early in the month, Fed Chair Jerome Powell hinted at a slower and more measured approach to interest rates hikes going forward. This, along with news that U.S. and Chinese trade officials were planning to meet, pushed the markets higher. The following week, the equity markets posted their third consecutive weekly gains after the Fed reassured investors it would remain flexible and patient on monetary policy. Also providing some market cheer, the December Consumer Price Index slipped 0.1% (its first decline in nine months), and the increase in the cost of living over the last 12 months slowed to 1.9% from 2.2%. Crude oil futures were also on the rise as investors evaluated the Fed s dovish comments and OPEC production cuts began taking effect. Upbeat Q4 earnings reports and forward guidance pushed U.S. equities into the plus column for a fifth consecutive week as investors anticipated the Federal Reserve would take a much more dovish stance in 2019 than previously thought. Toward month-end, the central bank surprised many by indicating it will adjust its balance sheet reduction process if necessary, causing interest rates to decline significantly through the last day of the month. For the month of January, the Treasury curve shifted downward, with yields declining between 0.02% and 0.10%. The six-month yield witnessed the largest decline for the month dropping 10 bps to 2.46%, while the one- and two-month yields saw the smallest declines 2 bps, to 2.42% and 2.43%, respectively. For January, the dollar strengthened marginally against the euro (+0.03%), but weakened against the pound (-2.85%) and the yen (-0.77%). Commodities prices were up for the month, with near-month gold prices gaining 3.24% to close the month at $1,319.70/ounce, and with front-month crude oil prices rising 18.45% to close at $53.79/barrel. Authored by: Stock & Mixed Equity ETFs -18.8 35.2 Bond ETFs 16.2 14.9 TOTAL -2.6 50.1 TABLE 2 ESTIMATED NET FLOWS OF MAJOR EQUITY ETF TYPES, 2019 VERSUS 2018 ($BIL) USDE ETFs -18.5 27.5 Sector Equity ETFs -6.9-10.6 World Equity ETFs 5.3 18.0 Mixed-Asset ETFs -0.7 0.6 Alternative ETFs 2.1-0.3 TOTAL -18.8 35.2 TOM ROSEEN HEAD OF RESEARCH SERVICES LIPPER 7
EQUITY ETFs UNITED STATES DIVERSIFIED EQUITY (USDE) ETFs For the first month in ten, the USDE ETFs macroclassification experienced net outflows, handing back $18.5 billion for January. Lipper s broad-based 4x3- matrix subgroup witnessed net outflows for the first month in 11, but handed back just $446 million, with Multi-Cap Core ETFs (+$3.5 billion), Large-Cap Core ETFs (+$1.0 billion), and Mid-Cap Core ETFs (+$852 million) experiencing the largest net inflows of the subgroup. For the first month since March 2017, midcap ETFs (+$889 million) experienced the largest net inflows of the four capitalization groups, while smallcap ETFs (-$1.6 billion) were the group s laggards. Once again, core-oriented ETFs (+$4.5 billion) attracted the largest net inflows of the valuation subgroups for the month, while their value- and growth-oriented counterparts handed back $2.7 billion and $2.3 billion, respectively. Multi-Cap Value ETFs (-$2.7 billion) witnessed the largest net outflows of the macroclassification, bettered by Large-Cap Growth ETFs (-$1.3 billion). Outside the 4x3-matrix classifications, Equity Income ETFs (+$733 million) witnessed the largest net inflows of the macro-classification, while S&P 500 Index ETFs (-$17.1 billion) suffered the largest net outflows of the subgroup. Vanguard 500 Index ETF (VOO) individually witnessed the largest net inflows (+$1.8 billion), while SPDR S&P 500 ETF Trust (SPY) witnessed the largest individual net outflows (-$12.2 billion). For the three-month period ended January 31, the USDE ETFs macro-classification took in $31.4 billion net. TABLE 3 ESTIMATED NET FLOWS OF USDE 4X3-MATRIX ETFs, 2019 VERSUS 2018 ($MIL) VALUE CORE GROWTH Large-Cap -32.1 1,010.4-1,301.3-323.1 8,095.8 Multi-Cap -2,664.4 3,458.7-206.4 588.0 9,180.5 Mid-Cap -63.0 851.5 100.8 889.3 742.0 Small-Cap 53.3-777.9-875.4-1,600.0 2,710.1 TOTAL -2,706.1 4,542.7-2,282.3-445.8 20,728.4 TABLE 4 ESTIMATED NET FLOWS OF OTHER USDE CLASSIFICATIONS, 2019 VERSUS 2018 ($MIL) Equity Leverage ETFs -1,699.3 1,345.6 Equity Income ETFs 732.5 5,556.4 Specialty Diversified ETFs - - S&P 500 Index ETFs -17,130.2-108.4 TOTAL -18,097.0 6,793.6 8
EQUITY ETFs WORLD EQUITY ETFs For the fourth month in a row, APs were net purchasers of World Equity ETFs, injecting $5.3 billion for January. However, for the first month in 28, APs were net redeemers of International Diversified Equity ETFs, redeeming a net $2.0 billion for January. And for the first month five, APs were also net redeemers of the Global Diversified Equity ETFs subgroup (-$437 million for January). For the fourth consecutive month, APs were net purchasers of the non-3x3-matrix subgroup, injecting $7.7 billion for January. Emerging Markets ETFs, attracting a net $7.8 billion, jumped to the top of the charts for the month, while International Multi-Cap Growth ETFs (+$1.2 billion) and China Region ETFs (+$555 million) took the number-two and -three spots. International Multi-Cap Core ETFs (December s leader) experienced the largest net redemptions of the macroclassification, handing back $3.6 billion for the month, bettered by European Region ETFs (-$1.1 billion). ishares Core MSCI Emerging Markets ETF (IEMG), with net inflows of $4.3 billion for January, attracted the most individual interest in the macro-classification. Vanguard Developed Markets Index ETF (VEA) handed back the largest individual net redemptions (-$1.4 billion). Over the last three months, the World Equity ETFs macro-classification took in $35.0 billion net. TABLE 5 ESTIMATED NET FLOWS OF GLOBAL DIVERSIFIED EQUITY ETFs, 2019 VERSUS 2018 ($MIL) TABLE 6 ESTIMATED NET FLOWS OF INTERNATIONAL DIVERSIFIED EQUITY ETFs, 2019 VERSUS 2018 ($MIL) VALUE CORE GROWTH Large-Cap 11.2 24.7 0.0 35.9 63.4 Multi-Cap 0.0-450.8-25.2-476.0 2,632.7 Small-/Mid-Cap (No Style) 2.8 2.8 5.6 TOTAL (LARGE & MULTI) 11.2-426.1-25.2-437.3 2,701.7 VALUE CORE GROWTH Large-Cap -18.3 29.5 8.3 19.5 473.2 Multi-Cap 91.7-3,606.4 1,175.5-2,339.2 10,608.0 Small-/Mid-Cap -0.7-40.6 399.3 358.0 601.4 TOTAL 72.7-3,617.5 1,583.2-1,961.6 11,682.7 TABLE 7 ESTIMATED NET FLOWS OF REMAINING WORLD EQUITY ETF CLASSIFICATIONS, 2019 VERSUS 2018 ($MIL) China Region ETFs 555.5 182.4 Emerging Markets ETFs 7,835.6 3,475.2 European Region ETFs -1,118.3-1,195.7 Global Equity Income ETFs 50.4 28.2 India Region ETFs -55.1-15.9 International Equity Income ETFs 81.3-109.9 Japanese ETFs -454.1-561.6 Latin American ETFs 134.4 507.0 Pacific Region ETFs 159.7-36.5 Pacific ex-japan ETFs 494.8 1,320.2 TOTAL 7,684.2 3,593.4 9
EQUITY ETFs SECTOR EQUITY ETFs For the fourth month running, Sector Equity ETFs witnessed net outflows handing back $6.9 billion for January, with 19 of Lipper s 27 Sector Equity ETF classifications witnessing net outflows. Commodities Precious Metals ETFs (+$2.2 billion), Telecommunication ETFs (+$994 million), and Global Health/Biotechnology ETFs (+$273 million) were at the top of the charts for the month, while Natural Resources ETFs (-$2.3 billion), Science & Technology ETFs (-$1.7 billion), and Industrials ETFs (-$1.5 billion) suffered the largest net redemptions. SPDR Gold Shares (GLD), taking in a net $1.5 billion, attracted the largest individual draw for January. At the bottom of the individual ETF pile, Energy Select Sector SPDR Fund (XLE) handed back a net $1.7 billion for the month. The Sector Equity ETFs macro-classification handed back a net $19.4 billion over the last three months. TABLE 8 ESTIMATED NET FLOWS OF SECTOR EQUITY ETFs, 2019 VERSUS 2018 ($MIL) Precious Metals Equity ETFs -524.8 612.5 Basic Materials ETFs -225.9-480.9 Consumer Goods ETFs -141.5 143.8 Commodities Agriculture ETFs -9.0-81.6 Commodities Energy ETFs -64.4 99.4 Commodities General ETFs -304.1-234.8 Commodities Base Metals ETFs 1.1-0.7 Commodities Precious Metals ETFs 2,213.6 1,353.3 Commodities Specialty ETFs -64.5 76.0 Consumer Services ETFs -1,129.6-1,122.0 Energy MLP ETFs -181.3 379.1 Financial Services ETFs -1,434.4-4,791.1 Global Financial Services ETFs -183.7-261.6 Global Health/Biotechnology ETFs 273.2 54.1 Global Infrastructure ETFs 39.8-44.9 Global Natural Resources ETFs -204.1-310.2 Global Real Estate ETFs 55.3 36.5 Global Science/Technology ETFs 157.7-274.2 Health/Biotechnology ETFs 8.9-1,276.0 Industrials ETFs -1,463.1-1,317.5 International Real Estate ETFs -31.2-111.5 Natural Resources ETFs -2,337.4 189.1 Real Estate ETFs -191.2-478.1 Specialty/Miscellaneous ETFs -243.9-842.4 Science &Technology ETFs -1,678.0-2,352.0 Telecommunication ETFs 994.2-208.6 Utility ETFs -234.3 677.0 TOTAL -6,902.8-10,567.2 10
EQUITY ETFs ALTERNATIVES ETFs For the second month in three, Alternatives ETFs witnessed net inflows, taking in $2.1 billion for January. APs were net purchasers of Dedicated Short Bias ETFs (+$2.0 billion), with Alternative Long/Short Equity ETFs and Alternative Active Extension ETFs experiencing the next largest net inflows of the group (+$57 million and $56 million, respectively). Alternative Multi-Strategy ETFs (-$59 million) and Alternative Managed Futures ETFs (-$21 million) witnessed the largest net outflows of the group. ProShares UltraPro Short QQQ ETF (SQQQ), taking in some $447 million, drew the largest individual net inflows of the macro-classification, while IQ Hedge Multi-Strategy Tracker ETF (QAI) handed back $73 million and suffered the largest individual net withdrawals of the group. Alternatives ETFs attracted $2.4 billion net over the last three months. TABLE 9 ESTIMATED NET FLOWS OF ALTERNATIVES ETFs, 2019 VERSUS 2018 ($MIL) Absolute Return ETFs -1.6 8.6 Alternative Active Extension 55.7-24.0 Alternative Equity Market Neutral ETFs 6.3 14.7 Alternative Event Driven ETFs 4.5 81.0 Alternative Global Macro ETFs 30.2 8.5 Alternative Long/Short Equity ETFs 57.0 73.1 Alternative Managed Futures ETFs -20.6 48.2 Alternative Multi-Strategy ETFs -59.4 168.5 Dedicated Short Bias ETFs 2,009.6-699.3 TOTAL 2,081.8-320.9 11
FIXED INCOME ETFs FIXED INCOME ETFs For the third month in a row, fixed income ETFs (+$16.2 billion for January) witnessed net inflows. On the taxable bond ETFs side (+$16.6 billion), 19 of the 28 Lipper classifications attracted net new money for the month. Meanwhile, tax-exempt offerings (-$343 million) reported net outflows in three of the eight classifications. On the taxable side, net flows into General U.S. Treasury ETFs (+$5.1 billion) and Corporate Debt BBB-Rated ETFs (+$4.5 billion) beat those of the other classifications. Short Investment- Grade Debt ETFs (-$3.9 billion) and Ultra Short Obligation ETFs (-$693 million) suffered the largest net redemptions of the group. Vanguard Short-Term Corporate Bond Index ETF (VCSH), with net inflows of $3.0 billion, attracted the largest individual inflows of the group, while Vanguard Short-Term Bond Index ETF (BSV), handing back some $4.1 billion for January, suffered the largest individual net redemptions. On the tax-exempt side, Short/Intermediate Municipal Debt ETFs (+$106 million) attracted the largest net inflows, while General & Insured Municipal Debt ETFs handed back the largest net outflows of the subgroup (-$398 million). Over the last three months, the Fixed Income ETFs macro-classification took in $46.8 billion net. TABLE 10 ESTIMATED NET FLOWS OF MAJOR FIXED INCOME ETF TYPES, 2019 VERSUS 2018 ($MIL) TAXABLE MUNICIPAL Long-Term Bond 16,274.2-407.1 15,867.0-1,305.6 Short & Intermediate 277.5 63.9 341.3 16,168.2 TOTAL 16,551.6-343.3 16,208.4 14,862.5 Refinitiv 2019. All Rights Reserved. The Financal and Risk business of Thomson Reuters is now Refinitiv. Lipper FundFlows Insight Reports are for informational purposes only, and do not constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any entity in any jurisdiction. No guarantee is made that the information in this report is accurate or complete and no warranties are made with regard to the results to be obtained from its use. In addition, Lipper will not be liable for any loss or damage resulting from information obtained from Lipper or any of its affiliates. For immediate assistance, feel free to contact Lipper Client Services toll-free at 877.955.4773 or via email at LipperClientServices@ thomsonreuters.com. For more information about Lipper, please visit our website at financial.tr.com or lipperalphainsight.com 12 2018 Refinitiv