3 ETFs With Huge Inflows

| February 6, 2013 | 0 Comments

inflowsKeeping track of ETF inflows is a good way to see where money is moving in the market.  And more importantly, inflows tell you which ETFs investors are buying.

Last week, investors shoveled an impressive $8 billion into US listed ETFs. 

Most of that money went into US and international stock ETFs.  A clear sign investors feel comfortable taking on more risk.

Overall, ETF assets increased by 1% to a whopping $1.423 trillion.

Here are three ETFs that saw some of the largest inflows during the week ending on February 1st.

SPDR S&P Retail (XRT)

XRT saw heavy buying with net inflows topping $244 million.  That brought the fund’s assets under management up to nearly $755 million. 

A stunning 48% increase from the prior week.

As a result, XRT set a new 52-week high of $67.53.  It’s second new high in as many weeks.

Investors stampeded into XRT in anticipation of strong same store sales at US retailers.  And they weren’t disappointed.

According to Thomson Reuters, same store sales overall surged 5.8% in January.  That blew away analysts’ forecasts for an increase of just 3.5% as well as the year-ago gain of 2.8%.

Of course, better than expected monthly sales is bullish for retailers’ first quarter earnings.

XRT has gained 8.7% so far this year.  And the retail sector ETF is up more than 21% over the past 12 months.

iShares Dow Jones US Technology (IYW)

Net inflows for IYW were a hefty $270 million.  As a result, the ETF’s assets under management rose 17% to $1.85 billion.

Investors flocked to IYW on the heels of strong earnings reports from leading tech firms.  IBM (IBM) reported fourth quarter revenues and earnings that topped analysts’ estimates.  And although revenues were a bit light, Google (GOOG) beat its earnings estimates as well.

Both companies are major holdings of IYW.

While inflows for IYW were strong, the ETF did not increase much in value.  It gained just 1.3% for the week and closed at $72.40.

However, it may not stay put for long…

A recent Forbes article lists IYW as one of the top tech ETFs to buy right now.  IYW is up 2.1% in 2013 and 2.5% over the past year.

Vanguard Dividend Appreciation (VIG)

VIG’s net inflows of $775 million were the second most of any ETF last week.  Only the SPDR S&P 500 (SPY), which celebrated its 20th anniversary last week, saw larger net inflows.

The huge influx of cash boosted VIG’s assets under management by nearly 6% to $13.8 billion.

The heavy buying of VIG shows investors still want to own dividend ETFs for yield.  While money market funds and savings accounts are paying less than 1% interest, VIG offers an attractive yield of 2.24%.

And as far as dividend ETFs go, you can’t do much better than VIG.  The fund invests only in companies that have a record of increasing dividends over time.

A few of VIG’s top holdings are Wal Mart (WMT), Coca-Cola (KO), IBM (IBM), Chevron (CVX), and Pepsico (PEP).

VIG is up 6.8% year-to-date, and it has gained more than 14% over the past year.  

Profitably Yours,

Robert Morris

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Category: Dividend ETFs, ETFs, Sector ETFs

About the Author ()

Wall Street veteran and ETF specialist Robert Morris helped created ETF Trading Research in order to help investors get the most out of their ETF investments. Before creating ETR, Robert worked for a number of prestigious Wall Street firms such as Salomon Smith Barney, UBS, Hyperion Financial and Charles Schwab.

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