Equity ETFs stretch their winning streak to three quarters in a row
Plus all the latest data on equity ETFs' second quarter performance
Despite hitting multiple record highs and triple-digit lows over the three months, the markets were generally in a sideways pattern during second quarter 2015. While the Russell 2000 and the NASDAQ Composite managed to break into record territory in mid-June, advances to new highs were generally just at the margin. However, at June month-end concerns about the Greek debt drama, looming U.S. interest rate increases, Puerto Rico’s inability to service its public debt, and China’s recent market slide weighed heavily on investors.
A positive finish for equities on the last trading day of June wasn’t enough to offset the Greek debt-inspired meltdown from the prior day, and many of the major indices witnessed their first quarterly loss in ten, with the Dow Jones Industrial Average and the S&P 500 losing 0.88% and 0.23%, respectively, for Q2, while the NASDAQ Composite gained 1.75%. The average equity exchange-traded fund (ETF) (+0.05%) just managed to stay in the black for Q2, stretching the winning streak to three quarters in a row.
During Q2 2015 the dollar weakened against the euro (-3.67%) and the pound (-5.59%) but gained against the yen (+1.83%). Commodity prices were mixed, with near-month crude oil prices gaining 24.94% to close the quarter at $59.47/barrel and with gold declining 0.98% to end the quarter at $1,171.50/ounce.
Equity ETFs ranked by quarterly returns
| Name/ticker | 3-month return | 1-year return | Net assets ($M) | Expense ratio* | 3-month average daily volume |
|---|---|---|---|---|---|
| iShares MSCI China Small-Cap ETF (ECNS) | 22.13% | 31.04% | $49.5 | 0.61% | 7,127 |
| Deutsche X-trackers Hvst CSI500 China A-Shs SC ETF (ASHS) | 20.58% | 120.23% | $75.6 | 0.80% | 155,094 |
| KraneShares CSI China Internet ETF (KWEB) | 19.31% | 10.28% | $89.7 | 0.68% | 121,084 |
| ALPS Medical Breakthroughs ETF (SBIO) | 18.86% | N/A | $122.4 | 0.50% | 91,344 |
| United States Gasoline Fund LP (UGA) | 18.41% | -34.48% | $103.2 | 0.75% | 59,091 |
| United States Oil Fund LP (USO) | 18.15% | -48.70% | $2,284.4 | 0.76% | 21,207,413 |
| Guggenheim Invest China Small Cap ETF (HAO) | 17.16% | 28.38% | $271.2 | 0.76% | 286,889 |
| Global X NASDAQ China Technology ETF (QQQC) | 15.53% | 14.91% | $22.4 | 0.65% | 1,026 |
| Global X China Materials ETF (CHIM) | 15.35% | 27.64% | $4.5 | 0.65% | 2,410 |
| SPDR S&P Biotech ETF (XBI) | 14.60% | 65.34% | $2,712.6 | 0.35% | 1,090,212 |
| WisdomTree Japan Hedged Financials Fund (DXJF) | 13.33% | 31.28% | $31.2 | 0.43% | 20,600 |
| iShares MSCI UAE Capped ETF (UAE) | 13.29% | 0.92% | $36.1 | 0.62% | 19,286 |
| Market Vectors ChinaAMC SME-ChiNext ETF (CNXT) | 13.15% | N/A | $50.8 | 0.66% | 161,675 |
| Global X China Financials ETF (CHIX) | 13.04% | 46.32% | $108.7 | 0.65% | 20,677 |
| ETFis BioShares Biotechnology Products Fund (BBP) | 13.04% | 0.00% | $21.0 | 0.85% | 21,845 |
| PureFunds ISE Cyber Security ETF (HACK) | 12.81% | N/A | $1,205.8 | 0.75% | 900,826 |
| PowerShares Golden Dragon China Port (PGJ) | 12.80% | 8.91% | $222.7 | 0.70% | 46,118 |
| United States 12 Month Oil Fund LP (USL) | 12.02% | -43.10% | $80.5 | 0.99% | 74,662 |
| Teucrium Wheat Fund (WEAT) | 11.89% | -11.31% | $32.4 | 3.67% | 17,412 |
| Global X China Industrials ETF (CHII) | 11.58% | 46.63% | $8.5 | 0.65% | 3,017 |
| iShares MSCI United Kingdom Small-Cap ETF (EWUS) | 11.23% | 5.38% | $16.9 | 0.59% | 4,976 |
| Deutsche X-trackers Hvst CSI 300 China A-Shs ETF (ASHR) | 10.95% | 107.44% | $1,009.6 | 0.80% | 2,426,405 |
| Global X Central Asia & Mongolia Index ETF (AZIA) | 10.93% | -22.40% | $2.7 | 0.69% | 2,513 |
| KraneShares Bosera MSCI China A Share ETF (KBA) | 10.84% | 100.28% | $29.6 | 0.85% | 25,370 |
| United States Brent Oil Fund LP (BNO) | 10.52% | -50.10% | $105.2 | 0.90% | 32,971 |
| ETFis BioShares Biotechnology Clinical Trials Fund (BBC) | 10.26% | N/A | $30.8 | 0.85% | 25,652 |
| Deutsche X-trackers MSCI All China Equity ETF (CN) | 10.24% | 65.35% | $17.1 | 0.70% | 7,307 |
| Market Vectors ChinaAMC A-Share ETF (PEK) | 10.22% | 105.95% | $133.6 | 0.72% | 128,526 |
| PowerShares KBW Regional Banking Portfolio (KBWR) | 10.01% | 15.22% | $41.7 | 0.35% | 8,104 |
| United States Diesel-Heating Oil Fund LP (UHN) | 9.88% | -30.91% | $5.8 | 0.75% | 1,349 |
| First Trust China AlphaDEX Fund (FCA) | 9.40% | 24.14% | $32.7 | 0.80% | 2,326 |
| PowerShares DB Energy Fund (DBE) | 8.94% | -43.78% | $145.1 | 0.78% | 96,184 |
| First Trust NASDAQ ABA Community Bank Index Fund (QABA) | 8.83% | 12.13% | $77.3 | 0.60% | 12,946 |
| EMQQ The Emerging Markets Internet & Ecommerce ETF (EMQQ) | 8.70% | N/A | $11.4 | 0.86% | 5,619 |
| SPDR S&P Bank ETF (KBE) | 8.70% | 10.34% | $3,023.4 | 0.35% | 1,382,908 |
| PowerShares DB Oil Fund (DBO) | 8.61% | -52.31% | $580.5 | 0.79% | 407,864 |
| SPDR S&P Regional Banking ETF (KRE) | 8.54% | 11.39% | $2,775.4 | 0.35% | 4,089,634 |
| iShares S&P GSCI Commodity-Indexed Trust (GSG) | 8.45% | -37.37% | $851.3 | 0.75% | 203,848 |
| Global X China Consumer ETF (CHIQ) | 8.26% | 4.76% | $108.9 | 0.65% | 19,438 |
| iShares MSCI Emerging Markets Energy Capped ETF (EMEY) | 7.58% | -21.55% | $3.0 | 0.67% | 1,567 |
ETF investors (authorized participants, or APs) were net purchasers of long-term assets for Q2, injecting $24.8 billion into equity ETFs while also being net purchasers of taxable fixed income ETFs (+$1.0 billion) and municipal debt ETFs (+$0.6 billion). Despite global concerns, for the second consecutive quarter APs were net purchasers of nondomestic equity ETFs, injecting $35.8 billion into the subgroup, while being net redeemers of domestic equity ETFs (-$11.0 billion).
Lipper’s U.S. Diversified Equity ETFs macro-classification—handing back some $9.4 billion—witnessed the largest net redemptions of the equity macro-classifications during the quarter. Developed International Markets ETFs—taking in $30.7 billion for Q2—was the top attractor of net new money, followed at a distance by Emerging Markets ETFs (+$5.6 billion) and Mid-Cap ETFs (+$3.8 billion).
Equity ETFs with the largest outflows
| Name/ticker | 3-month estimated net flows ($M) | 3-month return | 1-year return | Net assets ($M) | Expense ratio* |
|---|---|---|---|---|---|
| SPDR S&P 500 ETF Trust (SPY) | -$14,578.7 | 0.26% | 7.31% | $170,512.1 | 0.10% |
| Vanguard REIT Index Fund;ETF (VNQ) | -$1,924.4 | -10.48% | 3.79% | $23,728.7 | 0.12% |
| iShares Russell 2000 ETF (IWM) | -$1,304.6 | 0.43% | 6.57% | $29,690.0 | 0.20% |
| iShares US Real Estate ETF (IYR) | -$1,285.5 | -9.16% | 3.10% | $4,222.6 | 0.45% |
| iShares Core S&P 500 ETF (IVV) | -$994.3 | 0.26% | 7.36% | $67,701.8 | 0.07% |
| United States Oil Fund LP (USO) | -$982.0 | 18.15% | -48.70% | $2,284.4 | 0.76% |
| SPDR Gold Shares (GLD) | -$954.9 | -1.45% | -11.31% | $26,773.7 | 0.40% |
| Consumer Staples Select Sector SPDR Fund (XLP) | -$874.0 | -1.75% | 9.51% | $7,209.9 | 0.15% |
| SPDR Dow Jones Industrial Average ETF Trust (DIA) | -$810.0 | -0.34% | 7.06% | $11,036.5 | 0.16% |
| Consumer Discretionary Select Sector SPDR Fund (XLY) | -$805.7 | 1.87% | 16.23% | $10,307.0 | 0.15% |
| Utilities Select Sector SPDR Fund (XLU) | -$706.3 | -5.80% | -3.03% | $5,536.5 | 0.15% |
| iShares US Energy ETF (IYE) | -$676.6 | -2.00% | -23.60% | $1,455.8 | 0.45% |
| iShares Select Dividend ETF (DVY) | -$647.9 | -2.73% | 0.84% | $13,868.7 | 0.39% |
| SPDR S&P Dividend ETF (SDY) | -$556.4 | -1.87% | 4.45% | $12,925.5 | 0.35% |
| iShares Transportation Average ETF (IYT) | -$548.8 | -7.20% | -0.47% | $841.0 | 0.45% |
| iShares Core High Dividend ETF (HDV) | -$456.1 | -0.89% | 1.21% | $4,442.7 | 0.12% |
| Powershares S&P 500 Low Volatility Portfolio (SPLV) | -$388.9 | -2.88% | 5.57% | $4,656.2 | 0.25% |
| PowerShares QQQ Trust Series 1 (QQQ) | -$380.7 | 1.69% | 15.32% | $38,792.2 | 0.20% |
| Materials Select Sector SPDR Fund (XLB) | -$346.5 | -0.48% | -0.68% | $2,578.0 | 0.15% |
| iShares MSCI Brazil Capped ETF (EWZ) | -$332.8 | 6.55% | -29.34% | $2,794.7 | 0.61% |
Despite the on-again, off-again nature of the Greek debt drama, a volatile Chinese market, and a resurgence of news surrounding the possible default by Puerto Rico of its sovereign debt, the Emerging Markets ETFs macro-group (+1.77%) moved toward the top of the return charts for Q2, bettered only by Commodities ETFs (+2.41%). Despite its late-month meltdown in June, Lipper’s China Region ETFs classification (+7.36%) still managed to stay in strong positive territory for the quarter—outpaced only by Commodities Energy ETFs (+10.09%).
Equity ETFs with the largest inflows
| Name/ticker | 3-month estimated net flows ($M) | 3-Month Return | 1-year return | Net assets ($M) | Expense ratio* |
|---|---|---|---|---|---|
| Deutsche X-trackers MSCI EAFE Hedged Equity ETF (DBEF) | $5,531.1 | -2.10% | 10.64% | $12,154.0 | 0.35% |
| iShares MSCI EAFE ETF (EFA) | $4,097.5 | 0.63% | -4.36% | $60,941.3 | 0.33% |
| WisdomTree Europe Hedged Equity Fund (HEDJ) | $3,952.3 | -5.98% | 11.38% | $19,765.1 | 0.58% |
| Vanguard Total Stock Market Index Fund;ETF (VTI) | $2,807.2 | 0.09% | 7.21% | $57,159.1 | 0.05% |
| iShares MSCI Japan ETF (EWJ) | $2,431.3 | 2.99% | 7.91% | $19,598.1 | 0.50% |
| Vanguard FTSE Developed Markets ETF (VEA) | $2,427.2 | 1.03% | -3.97% | $27,824.9 | 0.09% |
| Vanguard 500 Index Fund;ETF (VOO) | $1,849.7 | 0.28% | 7.39% | $32,408.6 | 0.05% |
| WisdomTree Japan Hedged Equity Fund (DXJ) | $1,704.2 | 4.84% | 29.18% | $18,153.8 | 0.48% |
| iShares China Large-Cap ETF (FXI) | $1,673.2 | 5.53% | 26.70% | $8,075.2 | 0.74% |
| Vanguard FTSE Europe ETF (VGK) | $1,520.9 | 1.04% | -7.11% | $14,243.3 | 0.12% |
| Vanguard FTSE All-World ex US Index Fund;ETF (VEU) | $1,495.0 | 1.03% | -4.38% | $14,230.4 | 0.14% |
| iShares Core S&P Mid-Cap ETF (IJH) | $1,262.7 | -1.10% | 6.27% | $26,915.2 | 0.14% |
| iShares MSCI Germany ETF (EWG) | $1,062.5 | -5.45% | -9.69% | $7,212.4 | 0.51% |
| First Trust Dorsey Wright Focus 5 ETF (FV) | $1,045.0 | 1.87% | 23.56% | $3,770.3 | 0.94% |
| Vanguard FTSE Emerging Markets Fund ETF (VWO) | $1,018.5 | 1.73% | -2.41% | $47,665.8 | 0.15% |
| iShares Core MSCI Emerging Markets ETF (IEMG) | $932.4 | 0.96% | -4.64% | $7,668.7 | 0.18% |
| SPDR S&P Regional Banking ETF (KRE) | $778.2 | 8.54% | 11.39% | $2,775.4 | 0.35% |
| Deutsche X-trackers MSCI Europe Hedged Equity ETF (DBEU) | $772.0 | -4.00% | 6.26% | $2,476.8 | 0.45% |
| iShares Currency Hedged MSCI Germany ETF (HEWG) | $767.6 | -8.55% | 10.08% | $1,947.6 | 0.53% |
| First Trust Dorsey Wright Intl Focus 5 ETF (IFV) | $758.9 | 0.55% | $891.9 | 1.10% |
Three of the five top individual equity ETF performers were housed in the China Region ETFs classification: iShares MSCI China Small-Cap ETF (ECNS) posted the best quarterly return of the universe (+22.13%), followed by Deutsche X-trackers Harvest CSI 500 China A-Shares Small-Cap ETF (ASHS) (+20.58%), and KraneShares CSI China Internet ETF (KWEB) (+19.31%). Rounding out the top-five list were ALPS Medical Breakthroughs ETF (SBIO, housed in Lipper’s Health/Biotechnology ETFs classification) and United States Gasoline Fund LP (UGA, warehoused in Lipper’s Commodities Energy ETFs classification), returning 18.86% and 18.41%, respectively.
Newly-launched equity ETFs ranked by Q2 2015 daily trading volume
| Name/ticker | Classification | 3-month average daily volume | Expense ratio* |
|---|---|---|---|
| Pacer Trendpilot 750 ETF (PTLC) | Large-cap core | 423,509 | 0.60% |
| Pacer Trendpilot 450 ETF (PTMC) | Mid-cap core | 148,060 | 0.60% |
| Innovator IBD 50 Fund (FFTY) | Financial services | 108,048 | 0.80% |
| US Global Jets ETF (JETS) | Industrials | 93,520 | 0.60% |
| ETFis Tuttle Tactical Management Mlt-Strategy Inc (TUTI) | Alternative multi-strategy | 54,920 | 1.28% |
| Pacer Trendpilot 100 ETF (PTNQ) | Specialty/miscellaneous | 47,223 | 0.65% |
| AlphaMark Actively Managed Small Cap ETF (SMCP) | Small-cap growth | 29,602 | 0.90% |
| PowerShares S&P 500 ex-Rate Sensitive LV Portfolio (XRLV) | S&P 500 Index | 24,490 | 0.25% |
| Deutsche X-trackers Japan JPX-Nikkei 400 Eqty ETF (JPN) | Japanese Funds | 21,401 | 0.40% |
| WisdomTree Japan Hedged Dividend Growth Fund (JHDG) | Japanese Funds | 14,785 | 0.43% |
With an increased expectation of a rise in near-term interest rates, a decline in demand from China, and the Reserve Bank of India’s revising its inflation forecast higher, it was little wonder interest rate-sensitive, commodities, and a few emerging market country securities were pummeled during the quarter. Real Estate ETFs (-9.52%), Global Real Estate ETFs (-5.46%), and India Region ETFs (-5.40%) posted the lowest quarterly returns among the equity ETF classifications.
Three of the five worst performing individual ETFs were invested in Indonesia, which suffered a slowdown in economic growth during Q2, placing a pall over investor appetite. At the bottom of the heap was ProShares VIX Short-Term Futures ETF (VIXY, warehoused in Lipper’s Specialty/Miscellaneous ETFs classification), losing 20.87% for the quarter. Bettering VIXY somewhat were Market Vectors Indonesia Small-Cap ETF (IDXJ, -16.45%, housed in Lipper’s Emerging Markets ETFs classification), iShares MSCI Indonesia ETF (EIDO, -14.11%), Market Vectors Coal ETF (KOL, -13.82%), and Market Vectors Indonesia Index ETF (IDX, -13.31%).
One-year anniversary equity ETFs ranked by Q2 2015 daily trading volume
| Name/ticker | 3-month average daily volume | 3-month return | 1-year return | Net assets ($M) | Expense ratio* |
|---|---|---|---|---|---|
| WisdomTree International Hedged Dividend Growth Fund (IHDG) | 176,440 | -1.79% | 9.08% | $358.6 | 0.58% |
| Deutsche X-trackers Hvst CSI500 China A-Shs SC ETF (ASHS) | 155,094 | 20.58% | 120.23% | $75.6 | 0.80% |
| PowerShares Variable Rate Preferred Portfolio (VRP) | 126,901 | -0.84% | 2.29% | $255.8 | 0.50% |
| iShares Core MSCI Europe ETF (IEUR) | 75,787 | 1.10% | -6.72% | $545.6 | 0.14% |
| iShares Core Dividend Growth ETF (DGRO) | 42,200 | -1.01% | 5.45% | $178.1 | 0.12% |
| iShares Core MSCI Pacific ETF (IPAC) | 31,559 | 1.05% | 2.51% | $410.5 | 0.14% |
| iShares MSCI Qatar Capped ETF (QAT) | 21,454 | 2.32% | 8.41% | $51.5 | 0.61% |
| WisdomTree Japan Hedged Financials Fund (DXJF) | 20,600 | 13.33% | 31.28% | $31.2 | 0.43% |
| Merk Gold Trust (OUNZ) | 19,743 | -1.45% | -11.31% | $61.3 | 0.40% |
| iShares MSCI UAE Capped ETF (UAE) | 19,286 | 13.29% | 0.92% | $36.1 | 0.62% |
As of June 30. Excludes leveraged and inverse funds, and exchange traded notes. *Most recently reported net prospectus expense ratio.
Source: Lipper, a Thomson Reuters company
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