U.S. ETF market hit by sliding gold, bonds and EMs

The U.S. ETF market is worth $1.4 trillion, says Pat Chiefalo, director of derivatives and structured products at National Bank Financial.

But it didn’t perform well in June, according to his recent report. He and his research associates, Daniel Strauss and Ling Zhang, found the market posted outflows of $10.6 billion, or -0.7%. Sluggish bonds, gold and equities drove the drop in assets.

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The report says, “With the rate shocks in the mid and long end, fixed income saw a material outflow in June [of] 3%, pushing total outflows to $10.7 billion.”

It adds, “Equity was no picnic either with increased volatility and negative returns in the month, which potentially [drove] outflows of $1.5 billion. [This is] nevertheless modest on a percentage basis, given the $1.1 trillion space. Commodities mostly representing gold ETPs continued to follow bullion’s meltdown with $2.4 billion in outflows or -3%.”

However, “U.S. equities continued to attract assets with inflows of $4.9 billion or 1%, while U.S. fixed income shrank $6.3 billion or 3%.”

Meanwhile, emerging markets also slid, with redemptions of $6.4 billion or 4%, and an even more dramatic $1.4-billion or 11% outflow from fixed income ETF coffers, finds the report.

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Here at home, we’re also seeing major liquidation of ETF assets, with $400 million or 10% being removed from equity funds in June.

But the report reveals, “The remaining developed, global and regional ETFs saw positive and negative flows that were modest for the most part. Interestingly, global and regional fixed income saw inflows of 3%.”

For more, read the full report.

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