January 2020 ETF Flows: The Winners and the Losers
The first month of the new decade is history, and the results on January 2020 ETF flows are in. Overall, U.S.-listed ETFs gained an additional $51 billion in cash last month. Investors preferred U.S. equity ETFs, placing $17.4 billion in them, with an additional $15.4 billion in fixed income ETFs and $11.9 billion in international ETFs.
Two top issuers, Vanguard and BlackRock, unsurprisingly accounted for the ETFs with the biggest gains. While the absolute numbers are impressive, the percentage of inflows relative to assets under management was not particularly remarkable for many of these ETFs.
The following ETFs had the largest inflows during that period:
1. Vanguard Total Stock Market ETF (VTI)
With equities soaring, it is no surprise that a total stock market ETF from investment giant Vanguard would come out on top. With assets under management of $143 billion in this ETF, inflows for January were $2.7 billion. Vanguard is renowned for its low management expense ratio, and VTI’s is just 0.03 percent – or 3 basis points.
2. iShares Core MSCI EAFE ETF (IEFA)
As its name reveals, this ETF is issued by BlackRock, the world’s largest asset fund manager. With $75 billion in assets under management, inflows in January reached $2.5 billion. This international ETF trades with an expense ratio of 0.07 percent.
3. Vanguard Total Market Bond ETF (BND)
Although many bond ETFs saw significant outflows in January, that was not the case with this Vanguard product. With $51 billion in assets under management, BND saw net inflows of $2.1 billion. The management expense ratio is 0.035 percent.
4. iShares Core U.S. Aggregate Bond ETF (AGG)
Another BlackRock offering, this ETF also bucked the January bond ETF trend. With $72 billion in assets under management, AGG saw inflows of $2.1 billion in the year’s initial month. The net expense ratio is 0.05 percent.
5. iShares Core S&P 500 ETF (IVV)
This BlackRock ETF boasts $207 billion in assets under management. It is a key competitor to SPY, the largest ETF in the world. January inflows were just over $2 billion. IVV’s expense ratio is 0.04 percent.
6. iShares MBS ETF (MBB)
MBB focuses on U.S. mortgage-backed bonds (the MBS in its title stands for ‘mortgage-backed security’). With $23 billion in assets under management, this BlackRock ETF had $2 billion in inflows in January, for an 8.71 percent increase. The net expense ratio is 0.06 percent.
7. iShares ESG MSCI U.S.A. ETF (ESGU)
While this BlackRock ETF concentrating on well-rated environmental, social, and governance (ESG) companies has assets under management of $3.4 billion, its January inflows were an impressive $1.9 billion, or 56 percent of its total market value. Its expense ratio is a relatively high 0.15 percent.
8. Vanguard S&P 500 ETF (VOO)
This Vanguard ETF has $134 billion in assets under management, and its January inflows were $1.9 billion. This is yet another competitor to the dominant SPY ETF. VOO’s expense ratio is 0.03 percent.
9. Vanguard Intermediate-Term Corporate Bond ETF (VCIT)
With $28 billion in assets under management, VCIT saw January inflows of $1.8 billion. VCIT’s expense ratio is 0.05 percent.
10. Vanguard Small-Cap ETF (VB)
This small-cap ETF has assets under management of $29 billion, and January saw investors put $1.7 billion into it. VB’s expense ratio is 0.05 percent.
Not a Great Start for Bond ETFs
It wasn’t a great start to 2020 for many bond ETFs. Although ETFs in other asset classes also experienced considerable outflows, half of the biggest losers in the top 10 for January 2020 were various types of bond ETFs. Those ETFs with the highest outflows in January consisted of:
1. iShares Russell 2000 ETF (IWM)
The ETF with the largest outflows for January is a BlackRock small-cap index offering. With assets under management of $44 billion, IWM saw outflows of $2.6 billion. The expense ratio is 0.19 percent.
2. iShares iBoxx USD High Yield Corporate Bond ETF (HYG)
With $17 billion in assets under management, this BlackRock ETF saw outflows of $1.3 billion. The expense ratio is 0.49 percent.
3. SPDR Bloomberg Barclays High Yield Bond ETF (JNK)
Issued by State Street Global Advisors, JNK has $10 billion in assets under management and saw outflows of $1.3 billion in January. Its expense ratio is 0.4 percent.
4. iShares Russell 1000 Value ETF (IWD)
This value-seeking BlackRock ETF has assets under management of $41 billion, but experienced outflows of $1.2 billion in January. The expense ratio is 0.19 percent.
5. Vanguard Intermediate-Term Bond Fund (BIV)
With $12 billion in assets under management, this ETF saw outflows of almost 10 percent in January, or $1.1 billion. BIV’s expense ratio is 0.07 percent.
6. Vanguard Short-Term Corporate Bond ETF (VCSH)
VCSH’s assets under management total $24 billion, and 4.75 percent, or $1.1 billion, flowed out in the first month of 2020. VCSH’s expense ratio is 0.05 percent.
7. Invesco QQQ Trust (QQQ)
Invesco’s QQQ Trust tracks the technology-heavy NASDAQ 100. With assets under management of $90 billion, QQQ had January outflows of $1.1 billion. Its total expense ratio is 0.20 percent.
8. iShares 3-7 Year Treasury Bond ETF (IEI)
This BlackRock ETF saw outflows of 10 percent in January. With $8.9 billion in assets under management, investors took out $907 million. IEI’s expense ratio is 0.15 percent.
9. iShares MSCI ACWI ETF (ACWI)
This ETF tracks an index comprising large and mid-cap developed and emerging market equities, giving investors global exposure. With assets under management of $10 billion, January saw outflows of $759 million, or more than 7 percent. ACWI’s net expense ratio is 0.32 percent.
10. SPDR Portfolio S&P 500 Value ETF (SPVY)
Issued by State Street Global Advisors, SPVY’s index tracks U.S. value-based large cap stocks. Its assets under management are $4.3 billion, and in January, investors pulled out $710 million, resulting in a 16.72 percent outflow. SPVY’s expense ratio is 0.04 percent.
While the flow numbers in this article may seem staggering, they are simply a byproduct of the sheer scale of the global investor community. The positive flows of the largest funds in the world are largely driven by regular, biweekly deposits from regular people like you and I.
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