Follow the Money

There has been so much both occurring and looming out there in the world for the last few months – Government Shutdown, Debt Ceiling Crisis, Affordable Healthcare Act, new Nominee for Fed Chief - just to name a few that pose large potential impacts to the markets.

So what has all this meant for the markets and where are investors now placing their bets?  To gain perspective on where things have gone and perhaps where they may be heading, we think of that old saying “Just Follow the Money.”  Specifically, to and from where within the world of Exchange-Traded-Products has the capital been flowing recently?

Let’s start with the ETFG Fund Flows Summary for the last three months by Geographic Region.  Probably the clearest trend here is the broad and massive outflows in the month of August with almost $20B flowing out of Global ETPs and smaller but meaningful amounts relative to their market size flowing out of Emerging Markets ($1.3B), Developed ($2.3B) and Europe ($32M) ETPs.

Fixed Income Fund Flows

Certainly, one of the biggest stories within the Fixed Income Fund Flows this year has been the mass exodus from Municipal Bonds with Investors pulling out nearly $44 Billion.  This trend is not unique to the individual securities alone as Muni ETPs have also felt the pressure. As a recent sign of potential stability, on the heels of Detroit’s Bankruptcy filing in July, outflows within municipal ETPs seemed to have settled into a steady outflow of about $465 Million for July and August and then abated somewhat to a mere outflow of $165M in September.

Fund Flows for individual ETPs are available on the Fund Flows tab of each ETFG Tearsheet. For a summary view of the overall marketplace including the Top Inflows and Top Outflows for various time intervals, please see the ETFG Fund Flows Summary.

Top Fives

Taking a look at the headliners, these are the 5 Biggest outflows for the last 3 months:  TRSK, VIIZ, BONO, USO and BIZD.  On the positive side, here are the Top Five Biggest Inflows for the last 3 Months:  ONEK, JGBL, ITLY, KFYP and JPP.

There is a ton to learn from looking at these Fund Flow trends, please be sure to spend a minute on both the ETFG Fund Flows Summary as well as the Fund Flows tab on any ETFG Tearsheet.

Thank you for reading ETFG Daily Perspectives.