August ETF Flows: Sectors See Rotation

August ETF Flows: Sectors See Rotation by Dave Nadig, Director of Exchange Traded Funds – FactSet

Flows are out for August, and while flows were strong at $28.5 billion (the second highest flows for the year) August’s late summer doldrums were still a marked drop from July’s $52 billion high.

August’s big story is sector rotation. Financials and energy came back from a dismal July to top August’s inflows at $1.4 billion and $1.1 billion. Technology saw its first positive month since April. Telecommunications meanwhile shifted into the red for the first time this year. The $312 million loss was the sector’s first negative outflow since September 2015.

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ETF Flows

Emerging Markets equities saw strong flows this month, topping even US Large Caps. The segment saw inflows of $4.9 billion with iShares MSCI Emerging Markets ETF as this month’s market leader with $2.2 billion new assets.

Winners and Losers

While still topping the charts for YTD flows at almost $12 billion, SPDR Gold Trust, saw $613 million in outflows this August. Gold’s retreat saw a net $280 million pulled from the segment, leading to the first negative flows for commodities since April.

ETF Flows

August was another dismal month for WisdomTree, as the issuer lost a further $1.7 billion in assets as the bleeding continued in currency-hedged funds. Its star funds, WisdomTree Japan Hedged Equity Fund and WisdomTree Europe Hedged Equity Fund both made the top ten for this month’s biggest outflows with losses of $1.1 billion and $551 million respectively.

ETF Flows

Strong flows this month have put the industry firmly on track to match last year.

Related: July ETF Flows: Full Speed Ahead

In summary, August continued last month’s classic “risk on” trend, with strong flows throughout equities and fixed income, domestic and international.

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