The second quarter of Q2 was an eventful one and did not spare even the President of the United States from allegations related to his Russia links. A Fed rate hike, extension of the OPEC output cut deal and election in Europe were the other notable occurrences. Overall, global markets were steady in this time frame barring occasional hiccups (read: Trump Slump to Oil Slide: Top ETF Stories of First-Half 2017).
All the events left their mark on the quarterly ETF asset accumulation and redemption process. Let’s take a look at the corners that were the hot favorites of investors in the second quarter and those that were cast out. The data is as per etf.com till June 28, 2017 (read: Global ETFs Gather $4 Trillion AUM: What's Behind the Boom?).
S&P 500 ETFs Continue Gaining
The S&P 500 was on radar as investors continued to flock to iShares Core S&P 500 ETF (IVV - Free Report) and Vanguard S&P 500 Index Fund (VOO - Free Report) in Q2, after pouring billions in Q1. The funds IVV and VOO garnered respectively about $10.7 billion and $4.45 billion in the quarter (read: BlackRock's AUM at Record $5.4 Trillion: ETFs in Focus).
However, SPDR S&P 500 ETF Trust (SPY - Free Report) lost about $9.6 billion of assets in Q2 probably due to higher expense ratios compared with the other two same-themed products. Notably, IVV charges 4 bps, VOO charges 5 bps while SPY charges 9 bps in fees.
Developed International Markets Real Stars
Investors should note that development in international markets have also looked up lately. This must have propelled investors to store cash in foreign-themed ETFs. iShares MSCI EAFE ETF (EFA - Free Report) and iShares Core MSCI EAFE ETF IEFA that measure large, mid and small-capitalization developed market equities, barring the U.S. and Canada, fetched about $6.23 billion and $5.52 billion, respectively, in the quarter. Vanguard FTSE Developed Markets ETF VEA, another developed market fund excluding the U.S., saw about $4.67 billion of inflows.
Emerging Markets & Europe Follow the Leaders
Though the U.S. market is still in decent shape, Trump trade has lost some of its steam on policy uncertainty. This confusion has driven a sizable portion of investors’ money toward emerging markets and Europe where economies are on an uptrend. Ebbing political upheaval in Europe was another positive.
iShares Core MSCI Emerging Markets ETFIEMG and Vanguard FTSE Emerging Markets ETF (VWO - Free Report) hauled in about $4.36 billion and $3.15 billion in assets in the second quarter (read: Why Emerging Market ETFs Are Surging This Year).
On the other hand, Europe ETFs including Vanguard FTSE Europe ETF VGK and iShares MSCI Eurozone ETF (EZU - Free Report) added about $4.04 billion and $3.46 billion in the quarter.
Gold Mining Lost Luster
VanEck Vectors Gold Miners ETF (GDX - Free Report) shed about $3.12 billion in assets as gold prices remained weak in the second quarter as evident by about 0.1% losses seen in SPDR Gold Shares (GLD - Free Report) . VanEck Vectors Junior Gold Miners ETF (GDXJ - Free Report) too lost about $967.6 million in assets.
Small and Mid-Cap Out of Favor
Investors turned their face from small and mid-cap ETFs. Small-cap ETF iShares Russell 2000 ETF (IWM - Free Report) and mid-cap ETFsSPDR S&P Midcap 400 ETF Trust (MDY - Free Report) and iShares S&P Mid-Cap 400 Value ETF (IJJ - Free Report) fell out of investor favor. The trio saw about $1.16 billion, $724.9 million and $639.5 million of asset outflows.
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