Unusual Selling In Vanguard ETFs – Weekly ETF Fund Flows
Retail investors are flocking to ETFs as they become more mainstream. It’s estimated that half of the $1.8 billion in US listed ETFs comes from individual investors.
ETF providers like BlackRock, State Street, and Vanguard are engaged in a heated battle for investors’ money. They all want to increase their market share of the assets invested in ETFs.
BlackRock’s the global leader with nearly $4.4 trillion in assets in their ETFs worldwide. They have nearly $1 trillion in their iShares line of ETFs alone.
But they have been losing market share to State Street and Vanguard. In 2009, BlackRock controlled about 48% of the assets in the US ETF market. Today, they have about 39%.
Vanguard has been the biggest winner this year. Their ETFs have collected about $30 billion in net inflows.
But last week we detected an unusual amount of selling in Vanguard ETFs. Five Vanguard ETFs popped up among the top ten ETFs with large outflows.
The Vanguard Growth ETF (VUG) lost $658 million, Vanguard Mid-Cap (VO) lost $473 million, Vanguard Small-Cap (VB) lost $395 million, Vanguard Small-Cap Value (VBR) lost $335 million, and Vanguard Total Stock Market (VTI) lost $314 million.
In total, that’s $2.175 billion in net outflows from these five ETFs. And it all occurred on the same day. That leads me to believe Vanguard lost a big customer last week.
I wouldn’t read too much into these asset flows. Vanguard’s offerings of low-cost ETFs still make them a favorite option of retail investors.
As far as inflows go, we didn’t see any of their competitors see inflows that match up with the assets Vanguard lost. But I’ll be keeping an eye on the asset flows to see if these assets show up somewhere.
We did see assets flow into SPDR S&P 500 (SPY). It led all ETFs with inflows of more than $2.8 billion. We also saw large inflows into iShares MSCI EAFE (EFA) and iShares MSCI Emerging Markets (EEM)… EFA gained $694 million while EEM gained $638 million.
EFA and EEM are both focused on foreign stocks. EFA focuses on developed markets while EEM focuses on emerging markets.
The large inflow into ETFs that hold stocks outside of the US is worth paying attention to. This isn’t the first time we’ve seen asset flows among ETFs indicate that investors are allocating a larger portion of their money to stocks outside the US.
This is a trend that I expect to continue. If you haven’t already done so, now is the time to add some exposure to stocks outside of the US.
These markets are undervalued relative to US stocks. And we could see these areas outperform US stocks throughout the rest of the year.
That wraps up this week’s ETF fund flows…
Keep in mind, there’s a lot of information about ETF fund flows. And it can be a very useful tool as long as you know what you’re looking for.
Good Investing,
Corey Williams
Category: ETFs, Market Analysis
