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ETF Demand Relentless, $74B In April

Sumit Roy
16 min read

In This Article:

ETFs continued to swallow up assets in April as investors added $74.2 billion to the space. An unrelenting rally in U.S. stocks helped the mood during the month: The S&P 500 breached 4,200 for the first time, bringing its year-to-date gains up to 11.7%.

With four months in the books, U.S.-listed ETFs have pulled in a net $320.3 billion in fresh cash, well ahead of last year’s $121.1 billion pace.

While certainly large and impressive, nothing about April’s inflows was particularly surprising. U.S. equity ETFs picked up the lion’s share of new assets—$31.8 billion—followed by U.S. fixed income ETFs at $22.3 billion and international equity ETFs at $17.4 billion.

On a year-to-date basis, the ordering is slightly different: U.S. equity ETFs are in the lead with $152.2 billion of inflows, followed by international equity ETFs at $100 billion and U.S. fixed income ETFs at $53.7 billion.

Shortening Duration

April’s top inflows list was chock-full of the usual low cost, broad market ETFs. The Vanguard Total Stock Market ETF (VTI), the Vanguard S&P 500 ETF (VOO) and the Vanguard Short-Term Treasury Index ETF (VGSH) each picked up more than $2.4 billion of new assets during the month.

VGSH exemplified the move into short-dated fixed income securities during April. As a short-term Treasury ETF, VGSH doesn’t have as much interest rate risk as some other fixed income ETFs, a characteristic that investors might find appealing in an environment where rates have been climbing upward.

With asset prices elevated across the board, something like VGSH could also act as a place to park cash for investors interested in lightening up on risk.

‘TLT’ Struggles

The inflows into VGSH contrast with the $2.1 billion pulled from the iShares 20+ Year Treasury Bond ETF (TLT). The fund has struggled this year, losing 12% of its value as rates have jumped. In its April FOMC meeting, the Fed remained committed to keeping its benchmark rate near zero and its asset purchases at their current levels.

But many investors believe the central bank will start to pare back its stimulus measures if the economy keeps booming. TLT is among the most interest-rate-sensitive bond ETFs, making it particularly vulnerable to a rate spike.

Joining TLT on the top outflows list for April were the SPDR S&P 500 ETF Trust (SPY), the iShares Russell 2000 ETF (IWM), the ProShares UltraPro QQQ (TQQQ) and the SPDR Gold Trust (GLD).

For a full list of the top inflows and outflows for April and 2021 as a whole, see the tables below:

 

Top Gainers (April 2021)

Ticker

Name

Issuer

Net Flows ($,mm)

AUM ($M)

% of AUM

YTD 2021 Net Flows($,M)

VTI

Vanguard Total Stock Market ETF

Vanguard

4,176.79

240,609.77

1.74%

13,920.91

VOO

Vanguard S&P 500 ETF

Vanguard

3,219.85

220,344.19

1.46%

20,291.96

VGSH

Vanguard Short-Term Treasury Index ETF

Vanguard

2,401.25

12,554.09

19.13%

2,736.67

BND

Vanguard Total Bond Market ETF

Vanguard

2,363.86

73,844.35

3.20%

8,032.17

IVV

iShares Core S&P 500 ETF

Blackrock

2,217.00

277,912.32

0.80%

10,975.70

VTV

Vanguard Value ETF

Vanguard

2,161.71

77,272.50

2.80%

6,803.47

AGG

iShares Core U.S. Aggregate Bond ETF

Blackrock

2,068.09

86,948.47

2.38%

4,458.64

SCHD

Schwab U.S. Dividend Equity ETF

Charles Schwab

1,788.70

23,465.61

7.62%

4,411.23

GOVT

iShares U.S. Treasury Bond ETF

Blackrock

1,759.38

16,198.56

10.86%

2,175.61

BBEU

JPMorgan BetaBuilders Europe ETF

JPMorgan Chase

1,655.06

6,313.26

26.22%

2,485.87

 

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