Scalper1 News
After a tumultuous Q3, it might be wise to look at how the $2.1 billion ETF industry performed in the first month of fourth-quarter 2015. Overall, the month came as a breather after a throttling third quarter. The major U.S. indexes finished October on a positive note on a stabilizing global economy, the promise of further monetary stimuli from the global superpowers and a dovish Fed. Let’s take a look at the corners that were the hot favorites of investors and those that were casted out. Our study concludes that income and international ETFs were the star performers in terms of asset gathering as these saw maximum inflows while the broader U.S. market was the laggard. Gainers High-Yield Bonds – SPDR Barclays High Yield Bond (NYSEARCA: JNK ) Hopes of a delayed Fed rate hike pushed bond yields down in October and investors piled up cash in high-yield bond ETFs, both for income and growth. Moreover, junk bonds are well attached with the energy sector. As energy securities cover about 16% of the high-yield bond market, a recovery in oil prices bode well for high-yield ETFs in the month. Thanks to this trend, JNK, a popular junk bond ETF, was at the helm, having added over $2.6 billion in assets in the month. This propelled its AUM to $11.9 billion. Two other junk-bond ETFs, iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEARCA: LQD ) and iShares iBoxx $ High Yield Corporate Bond ETF (NYSEARCA: HYG ) also added about $2.52 billion and $2.23 billion, respectively, to their asset base and took the second and third spots. LQD and HYG ended the month with about $24.7 billion and $15.4 billion, respectively. Nasdaq – PowerShares QQQ (NASDAQ: QQQ ) Technology earnings have turned out pretty well this season with the numbers not only bettering pre-season expectations, but also outperforming the sector’s performance in other recent quarters. This boosted investors’ lure for the tech-heavy Nasdaq ETF QQQ which took the fourth rank. QQQ hauled in about $1.73 billion to exit the month with $37 billion in assets. Europe – iShares MSCI EMU ETF (NYSEARCA: EZU ) The European markets roared back in the month on the European Central Bank (ECB) president Mario Draghi’s reassurance of a more intensified and protracted QE measure, if need be. Sensing further easing potential, STOXX 600 added about 8% in October underscoring the largest monthly rally in six years. Investors also poured in $1.56 billion, the fifth largest in the list, to be part of this rally. EZU has now amassed over $13 billion. Losers U.S. – SPDR S&P 500 ETF Trust (NYSEARCA: SPY ) Despite the Fed-induced bounce, U.S. stocks – small and large – could not rope in investors’ attention. While global growth fears weighed on the S&P 500-based large-cap ETF SPY, a volley of weak U.S. economic data came in the way of Russell 2000-based small-cap ETF iShares Russell 2000 (NYSEARCA: IWM ). After all, U.S. economic growth tallied 1.5 % in Q3, falling short of expectation of 1.6%. The products, SPY and IWM, witnessed an outflow of about $827 million and $632 million, respectively. Short-Term U.S. Bonds – iShares 3-7 Year Treasury Bond ETF (NYSEARCA: IEI ) Though the bet over a faster rate hike eased in October, the investing world has started to prepare for a Fed lift-off by this year-end or early next year. Since short-term bonds are expected to underperform the most on an expected rise in benchmark interest rates, short-term bond ETFs fell out of investors’ favor. Moreover, short-term bond ETFs sport meager yields – another reason for the disfavor to yield-starved investors. Hence, IEI had to sacrifice about $511 million in net assets while iShares Short Treasury Bond ETF (NYSEARCA: SHV ) surrendered about $507 million. Biotechnology – iShares Nasdaq Biotechnology (NASDAQ: IBB ) Nagging concerns over the biotech space regarding the over pricing of life-saving drugs shifted this hot and soaring sector from its lofty position a bit. Though the downing trend is reversing lately, October was an off month for the biotech sector. The biotech fund IBB saw a net exodus of about $497 million in assets. Original Post Scalper1 News
Scalper1 News