ETF Inflows Halt in August

Exchange-traded funds posted net outflows totaling roughly $1.3 billion August, ending a six-month streak of consecutive monthly inflows, according to Morningstar Direct’s Fund Flows Update.

U.S. ETFs closed the month with about $812 billion in total net assets, down 2.3% month-over-month.  

For the second straight month, international-stock ETFs have led all asset classes in terms of net inflows, thanks to strong demand for emerging-markets funds, Morningstar said. International-stock ETFs posted $4.4 billion in net inflows. Over the trailing three-year period, emerging-markets ETFs have accounted for more than 61% of all flows into international-stock ETFs.  

SPDR S&P 500 SPY, the largest and most heavily traded ETF on the market, saw nearly $6.6 billion head for the exits in August, pushing total year-to-date net outflows for the fund to $19.1 billion. The tech-heavy PowerShares QQQ Trust QQQQ was a distant second in terms of highest net redemptions, after shedding about $2.1 billion last month. The iShares Russell 2000 Index IWM claimed the third spot on the largest outflows list with more than $1.6 billion in net outflows.  

Morningstar data showed iShares iBoxx $ High Yield Corporate Bond HYG and SPDR Barclays Capital High Yield Bond JNK, with inflows of $464 million and $332 million, respectively, led flows into junk bond ETFs, as investors took on more risk in search of more attractive yields in August. Short-term bond ETFs remained popular despite their unimpressive yields.   

Precious-metals ETFs, bolstered by inflows of $827 million into SPDR Gold Shares GLD, were the most popular ETFs in the commodities asset class in August.