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.¹ 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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¹Morningstar Direct. Includes all US-listed exchange-traded funds, exchange-traded notes and other exchange-traded products.
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