First-Half 2019 ETF Asset Flow Roundup

Stocks across the globe, as depicted by the MSCI World Index, have posted the strongest first-half gains in its near 40-year history, pulling in about $8 trillion in market capitalization. The combination of trade deal optimism and hopes of easy money policies across the globe led to the rally.

The bonds market too has impressed with strong performances owing to decline in yields. This is because trade jitters, global growth concerns, recession, geopolitical tension and Brexit issues continued to make investors cautious, raising the appeal for safe-haven avenues. Meanwhile, commodities also fared well with gold and oil being the hottest trades of the first half. Oil price surged by almost a quarter on tightening supply conditions while gold gained luster buoyed by investors’ flight to safety. A weak dollar also led to the rally in commodities (read: Should You Buy Gold ETFs Now?).

Per etf.com, overall ETFs gathered about $132.1 billion capital in the first half of 2019 with U.S. fixed income ETFs leading the way with $66.8 billion inflows, closely followed by $47.9 billion in U.S. equity ETFs and $8.7 billion in international equity ETFs.

Fixed Income ETFs Rocks

The fixed income world gained investors' love amid persistent stock market volatility and lower yields. The 10-year Treasury yield dropped below 2% for the first time since 2016. In particular, the appeal for the long-term bond ETFs like iShares 7-10 Year Treasury Bond (NYSE:IEF) ETF IEF and iShares 20+ Year Treasury Bond (NASDAQ:TLT) ETF (NZ:TLT) was on a high note compared to others. Investors flocked to these products due to their safe-haven status in times of turmoil. These ETFs have gathered about $5.8 billion and $4.9 billion in capital, respectively. Both funds have a Zacks ETF Rank #3 (Hold) (read: ETF Asset Report of Second-Quarter 2019).

Other bond ETFs like Vanguard Total International Bond ETF BNDX, iShares U.S. Treasury Bond ETF GOVT and iShares Core U.S. Aggregate Bond ETF (ASX:AGG) also gathered more than $4 billion each. GOVT also has a Zacks ETF Rank #3.

U.S. Equity ETFs Gained Love

Vanguard S&P 500 ETF VOO was the most-loved ETF of the first half 2019, pulling in nearly $9.2 billion in capital. This fund tracks the S&P 500 Index, which has reached record highs on several occasion. It has a Zacks ETF Rank #2 (Buy). This was followed by inflows of $5.9 billion for iShares Edge MSCI Min Vol U.S.A. ETF USMV and $4.8 billion for Vanguard Total Stock Market ETF (VTI). USMV has a Zacks ETF Rank #2 while VTI carries a Zacks ETF Rank #3 (read: S&P 500 Hits New High to Start 2H: Top-Ranked ETFs to Buy).

USMV offers exposure to U.S. stocks having lower-volatility characteristics than the broader U.S. equity market and VTI offers broad exposure across growth and value styles. On the other hand, SPDR S&P 500 ETF Trust (ASX:SPY) led the redemptions list with nearly $15.8 billion in outflows. This fund also has a Zacks ETF Rank #2.

International ETFs Attracts

Amid trade tensions, a few developed and emerging market ETFs were able to gather enough money in the first half. The central banks across the world are once again moving to easy money policies with some signaling interest rate cut and some launching fresh stimulus to tackle global growth headwinds. This has spread strong optimism internationally (read: Top Performing Country ETFs of 1H).

The iShares Core MSCI EAFE ETF IEFA led the way of international ETF inflows, pulling in nearly $7.2 billion in capital, followed by inflows of $5.4 billion for iShares Core MSCI Emerging Markets ETF IEMG. On the other hand, iShares MSCI EAFE ETF EFA saw outflows of $8.3 billion. IEFA and EFA target the developed market while IEMG offer exposure to emerging markets. All these funds have a Zacks ETF Rank #3.

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iShares Edge MSCI Min Vol USA ETF (USMV): ETF Research Reports

Vanguard S&P 500 ETF (VOO): ETF Research Reports

iShares 20+ Year Treasury Bond ETF (TLT): ETF Research Reports

iShares Core U.S. Aggregate Bond ETF (AGG): ETF Research Reports

iShares 7-10 Year Treasury Bond ETF (IEF): ETF Research Reports

iShares U.S. Treasury Bond ETF (GOVT): ETF Research Reports

iShares MSCI EAFE ETF (EFA): ETF Research Reports

SPDR S&P 500 ETF (NYSE:SPY): ETF Research Reports

Vanguard Total International Bond ETF (BNDX): ETF Research Reports

iShares Core MSCI Emerging Markets ETF (IEMG): ETF Research Reports

iShares Core MSCI EAFE ETF (IEFA): ETF Research Reports

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Zacks Investment Research