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U.S. equity funds witnessed outflows of about $10.3 billion in March, per an etf.com article, citing FactSet data. Investors pulled out $22.1 billion of large-cap focused funds. The outflows chart was led by SPDR S&P 500 ETF Trust (SPY - Free Report) and iShares Core S&P 500 ETF (IVV - Free Report) , which witnessed a respective $12.2 billion and $9.8 billion in outflow in March.
The high trading volumes of the popular S&P 500 ETFs also make it an attractive bet to gain short exposure to the markets, which might be one reason for the relative high volatility in fund flows.
However, the damage caused was lesser than the prior month. Net outflows decreased to $2.7 billion compared with $4.4 billion in February. The primary reason for these outflows was the reallocation of capital by investors, owing to the high degree of market volatility and events affecting the markets.
What’s Driving Outflows?
The first quarter was dismal for the United States equity markets. Moreover, Wall Street saw a glum start to the second quarter, with stocks tumbling to record lows amid continued pessimism in the market.
After a correction in early February owing to interest rate and inflation fears, markets recovered some of its losses to end the month on a slightly better note. However, March was not welcoming for stock bulls across the globe, as new concerns started bothering the markets.
President Trump’s plans to impose tariffs on various goods with its major trading partners introduced a sense of fear among investors, as they braced themselves up for a potential trade war (read: Safe Haven ETFs to Buy Amid Extended Selloff).
“The outflows reflect a reallocation of capital given what’s been going on in the market over the past several weeks. There’s a lot of headline risk, which caused the market to hit a bit of a banana peel in the final weeks of the quarter,” per a Market Watcharticle citing Matthew Bartolini, Head of SPDR Americas Research at State Street Global Advisors.
U.S. small-cap funds and international ex-US funds saw inflows in the month, with $2.84 billion and $5.5 billion flowing in, respectively. “The inflows into international and small-cap funds shows that investors were just reducing their large-cap exposure, they weren’t shying away from ETFs in general,” per Matthew Bartolini.
Let us now discuss some ETFs that witnessed volatile fund flows in March.
This fund is the most popular ETF traded in the U.S. markets. It seeks to provide exposure to the largest and most stable companies and tracks the S&P 500 index.
It has AUM of $246.7 billion and charges a fee of 9 basis points a year. From a sector look, the fund has high exposure to Information Technology, Financials and Health Care with 24.8%, 14.8% and 13.7% allocation, respectively. The fund’s top three holdings are Apple Inc (AAPL - Free Report) , Microsoft Corporation (MSFT - Free Report) and Amazon.com Inc (AMZN - Free Report) with 3.8%, 3.1% and 2.5% allocation, respectively. The fund has returned 12.9% in a year but has lost 1.9% year to date. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
This fund is a low-cost ETF that seeks to provide exposure to large established U.S. companies and tracks the S&P 500 index.
It has AUM of $137.4 billion and charges a fee of 4 basis points a year. From a sector look, the fund has high exposures to Information Technology, Financials and Health Care with 24.8%, 14.7% and 13.7% allocation, respectively. The fund’s top three holdings are Apple Inc, Microsoft Corporation and Amazon.com Inc with 3.8%, 3.1% and 2.5% allocation, respectively. The fund has returned 13.0% in a year but has lost 1.9% year to date. It has a Zacks ETF Rank #3 with a Medium risk outlook.
This fund seeks to provide exposure to small cap U.S. companies and tracks the CRSP US Small Cap Index. Small-caps saw inflows in the month as a result of capital reallocation (read: 3 Small-Cap ETFs Experiencing High Inflows).
It has AUM of $21.4 billion and charges a fee of 6 basis points a year. From a sector look, the fund has high exposures to Financials, Industrials and Consumer Services with 24.0%, 20.8% and 12.2% allocation, respectively. The fund’s top three holdings are Nektar Therapeutics (NKTR - Free Report) , Diamondback Energy Inc. (FANG - Free Report) and XPO Logistics (XPO - Free Report) with 0.4%, 0.3% and 0.3% allocation, respectively. The fund has returned 11.4% in a year. It has a Zacks ETF Rank #3 with a Medium risk outlook.
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U.S. Equities See Record Outflows: ETFs in Focus
U.S. equity funds witnessed outflows of about $10.3 billion in March, per an etf.com article, citing FactSet data. Investors pulled out $22.1 billion of large-cap focused funds. The outflows chart was led by SPDR S&P 500 ETF Trust (SPY - Free Report) and iShares Core S&P 500 ETF (IVV - Free Report) , which witnessed a respective $12.2 billion and $9.8 billion in outflow in March.
The high trading volumes of the popular S&P 500 ETFs also make it an attractive bet to gain short exposure to the markets, which might be one reason for the relative high volatility in fund flows.
However, the damage caused was lesser than the prior month. Net outflows decreased to $2.7 billion compared with $4.4 billion in February. The primary reason for these outflows was the reallocation of capital by investors, owing to the high degree of market volatility and events affecting the markets.
What’s Driving Outflows?
The first quarter was dismal for the United States equity markets. Moreover, Wall Street saw a glum start to the second quarter, with stocks tumbling to record lows amid continued pessimism in the market.
After a correction in early February owing to interest rate and inflation fears, markets recovered some of its losses to end the month on a slightly better note. However, March was not welcoming for stock bulls across the globe, as new concerns started bothering the markets.
President Trump’s plans to impose tariffs on various goods with its major trading partners introduced a sense of fear among investors, as they braced themselves up for a potential trade war (read: Safe Haven ETFs to Buy Amid Extended Selloff).
“The outflows reflect a reallocation of capital given what’s been going on in the market over the past several weeks. There’s a lot of headline risk, which caused the market to hit a bit of a banana peel in the final weeks of the quarter,” per a Market Watch article citing Matthew Bartolini, Head of SPDR Americas Research at State Street Global Advisors.
U.S. small-cap funds and international ex-US funds saw inflows in the month, with $2.84 billion and $5.5 billion flowing in, respectively. “The inflows into international and small-cap funds shows that investors were just reducing their large-cap exposure, they weren’t shying away from ETFs in general,” per Matthew Bartolini.
Let us now discuss some ETFs that witnessed volatile fund flows in March.
SPDR S&P 500 ETF (SPY - Free Report)
This fund is the most popular ETF traded in the U.S. markets. It seeks to provide exposure to the largest and most stable companies and tracks the S&P 500 index.
It has AUM of $246.7 billion and charges a fee of 9 basis points a year. From a sector look, the fund has high exposure to Information Technology, Financials and Health Care with 24.8%, 14.8% and 13.7% allocation, respectively. The fund’s top three holdings are Apple Inc (AAPL - Free Report) , Microsoft Corporation (MSFT - Free Report) and Amazon.com Inc (AMZN - Free Report) with 3.8%, 3.1% and 2.5% allocation, respectively. The fund has returned 12.9% in a year but has lost 1.9% year to date. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
iShares Core S&P 500 ETF (IVV - Free Report)
This fund is a low-cost ETF that seeks to provide exposure to large established U.S. companies and tracks the S&P 500 index.
It has AUM of $137.4 billion and charges a fee of 4 basis points a year. From a sector look, the fund has high exposures to Information Technology, Financials and Health Care with 24.8%, 14.7% and 13.7% allocation, respectively. The fund’s top three holdings are Apple Inc, Microsoft Corporation and Amazon.com Inc with 3.8%, 3.1% and 2.5% allocation, respectively. The fund has returned 13.0% in a year but has lost 1.9% year to date. It has a Zacks ETF Rank #3 with a Medium risk outlook.
Vanguard Small-Cap ETF (VB - Free Report)
This fund seeks to provide exposure to small cap U.S. companies and tracks the CRSP US Small Cap Index. Small-caps saw inflows in the month as a result of capital reallocation (read: 3 Small-Cap ETFs Experiencing High Inflows).
It has AUM of $21.4 billion and charges a fee of 6 basis points a year. From a sector look, the fund has high exposures to Financials, Industrials and Consumer Services with 24.0%, 20.8% and 12.2% allocation, respectively. The fund’s top three holdings are Nektar Therapeutics (NKTR - Free Report) , Diamondback Energy Inc. (FANG - Free Report) and XPO Logistics (XPO - Free Report) with 0.4%, 0.3% and 0.3% allocation, respectively. The fund has returned 11.4% in a year. It has a Zacks ETF Rank #3 with a Medium risk outlook.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>