The Return of Volatility and the Case for Earnings Quality
A Snapshot of Q3 Flows and Trends

Despite healthy net inflows totaling $44.8 billion in Q3, in line with $45 billion of net inflows in Q2, US-listed exchange-traded fund (ETF) assets declined by $132 billion for the quarter, to $1.99 trillion.┬╣ This quarter-over-quarter decline—the first since Q2 of 2013—was caused primarily by a correction in global equities.  Nonetheless, domestic equity was the strongest category for the quarter, bringing in $22.8 billion in net inflows, marking the first quarter of positive net flows for the category in 2015.  The taxable bond category followed close behind with roughly $22 billion in net inflows, compared to less than $1 billion of net inflows for the previous quarter.  The alternative category also had a significant increase in net inflows at $4 billion, the majority of which came from leveraged long and inverse ETFs.  The largest reversal in Q3 came from the international equity category, which suffered $1.3 billion in net outflows, after leading all categories for net inflows for the previous quarter with $46.5 billion.  Sector equity ETFs also reversed course, with $2.6 billion in net outflows, compared to $2.4 billion of net inflows for the previous quarter.

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┬╣Morningstar Direct. Includes all US-listed exchange-traded funds, exchange-traded notes and other exchange-traded products. 
Posted on Wednesday, November 18, 2015 @ 8:18 AM

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.