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As we step into the second half of 2015, it might be useful to look at how the $2.16-billion ETF industry performed in the first half of the year. After analyzing, we can conclude that currency-hedged ETFs and developed markets were the star performers in terms of asset gathering, as these saw maximum inflows, while the broader U.S. market was the laggard. Though “Grexit” worries in June had a last-minute impact on the half-yearly asset report, it could not totally derail the original sentiments. Let’s find out the top gainers and losers in terms of asset growth in the first half of 2015 (Source: etf.com ). Gainers Currency Hedging – WisdomTree Europe Hedged Equity ETF (NYSEARCA: HEDJ ) Currency hedging as a technique rocked in the first half of this year when it came to playing the developed economies like Europe. The rounds of monetary easing and the launch of the QE policy revived the eurozone this year. While policy easing devalued European currencies, the greenback strengthened on rising rate worries in the U.S. This policy differential made the currency hedging theme a shining star in 1H. Thanks to this trend, HEDJ, an ultra popular Europe ETF, was at the helm, having amassed over $14 billion in assets so far. Another exchange-traded fund, the Deutsche X-trackers MSCI EAFE Hedged Equity ETF (NYSEARCA: DBEF ), which tracks the stocks from Europe, Australia and the Fast East, also added about $10.7 billion to its asset base and took the second spot. Developed Economies – iShares MSCI EAFE ETF (NYSEARCA: EFA ) Since accommodative policies were common in developed nations, from Europe to Japan to Australia and some emerging economies, EFA and the Vanguard FTSE Developed Markets ETF (NYSEARCA: VEA ) took the third and tenth spots in the list, respectively. EFA hauled in about $6 billion, while VEA gathered about $2.7 billion in assets. Among the developed economies, Japan drew sizeable investor attention on stepped-up economic stimulus and after having come out of a technical recession in the final quarter of 2014. Though aggressive stimulus devalued the yen and bolstered the appeal for the hedged Japan ETFs, regular funds also did well in the first half. As a result, the WisdomTree Japan Hedged Equity ETF (NYSEARCA: DXJ ) and the iShares MSCI Japan ETF (NYSEARCA: EWJ ) – taking the sixth and seventh spots – saw inflows of $4.4 billion and $3.24 billion, respectively. Europe ETFs also gave an all-star performance, despite Greek debt default worries. Accordingly, the Vanguard FTSE Europe ETF (NYSEARCA: VGK ) and the iShares MSCI Germany ETF (NYSEARCA: EWG ) – the eighth and ninth position holders, each stacked up over $2.7 billion in assets. Vanguard ETFs – Vanguard Total Stock Market ETF (NYSEARCA: VTI ) and Vanguard S&P 500 ETF (NYSEARCA: VOO ) Since the relatively smaller market cap U.S. stocks rocked the show in 1H being better bets to guard from the rising dollar, the success behind VTI was self-explanatory. As the name suggests, VTI targets stocks across the capitalization spectrum and amassed about $4.9 billion assets. However, this does not seem the sole reason for the fund’s success. Vanguard’s low-cost approach was immensely popular in the last few years, which is why the issuer saw its asset base growing by leaps and bounds. Probably this was why VOO saw net asset inflows of $4.5 billion in 1H, despite the broader market underperformance. Losers U.S. – SPDR S&P 500 ETF Trust (NYSEARCA: SPY ) SPY, having witnessed an outflow of $42.7 billion in assets to-date, was the hardest hit. Though it started to gain traction on several occasions this year in line with the broader U.S. economic recovery, it could not woo investors. After all, the S&P 500 was flat in the first half. A soaring greenback and a harsh winter in the first quarter wrecked havoc on this benchmark index. Another fund by iShares, the iShares Core S&P 500 ETF (NYSEARCA: IVV ), also lost about $2.37 billion in assets. Investors should note that other ultra-popular ETFs that track key U.S. bourses like the Nasdaq and Dow Jones saw assets bleeding out of their products. The PowerShares QQQ Trust ETF (NASDAQ: QQQ ), which looks to track the tech-heavy Nasdaq, shed about $2.83 billion in assets and became the third-highest loser of 1H. The SPDR Dow Jones Industrial Average ETF (NYSEARCA: DIA ) too was in no better position, having lost about $1.67 billion in assets. Emerging Markets – iShares MSCI Emerging Markets (NYSEARCA: EEM ) The fund comes as a distant second, seeing a net exodus of about $3 billion in assets. The Fed rate hike worry was the major reason for investors’ aversion to the space. An anticipation of a cease in cheap dollar inflows may have caused investors to flee the space. Rate-Sensitive Sectors – Consumer Staples Select SPDR ETF (NYSEARCA: XLP ) and iShares U.S. Real Estate ETF (NYSEARCA: IYR ) Rate hike concerns sent jitters in the high-yielding sectors of the U.S. economy, leading investors to shy away from consumer staples and REIT ETFs, known for their high dividend yield. As a result, XLP had to sacrifice about $2.66 billion in net assets, while IYR surrendered about $1.61 billion. Original Post Scalper1 News
Scalper1 News