SHV sheds $2.14 billion as iShares credit and S&P 500 funds gain

Investors pulled $2.14 billion from SHV, the iShares Short Treasury Bond ETF, in the week to Nov. 1, the largest outflow among 431 iShares funds, according to iShares' published daily fund data.

Four iShares funds, LQD, HYG, IVV and IEF, took in $5.34 billion combined in the same week, iShares data show. That fits a rotation from short-dated Treasuries into investment-grade credit, high-yield credit, the S&P 500 and intermediate Treasuries. Flow data cannot show that the same money moved from one fund to another.

Advisors holding SHV in client portfolios saw the fund lose about 10% of its $21.4 billion in Oct. 30 assets in a single week, iShares data show. SHV's previous three weeks were +$29 million, -$196 million and +$110 million, so this outflow was more than ten times its largest recent weekly outflow. Other big moves were also large relative to fund size: EWZ's $1.09 billion outflow was about 11% of its $9.62 billion, and IGOV's $303 million about 29% of its $1.03 billion.

Net flow across the 431 funds, which hold $4.46 trillion, was $7.55 billion, down from $9.78 billion the prior week and $15.03 billion the week before that, iShares data show. Gross inflows of $16.19 billion across 287 funds were set against $8.64 billion of gross outflows across 143 funds. The figures cover iShares funds only, not the whole ETF market.

The Oct. 11 bars in the charts below are not usable flows. iShares' daily fund data computes a flow of -$289.6 trillion for that week from an anomalous share-count reading in EWZ, so comparisons here use the weeks of Oct. 18 and Oct. 25.

Corporate and high-yield funds took in $3.78 billion, up from $2.00 billion the prior week and the most of the 18 fund categories, according to iShares data. Three funds supplied about 92% of it: LQD took in $1.70 billion, HYG $1.05 billion and USHY $738 million, together $3.49 billion of the category's 49 funds.

Equity categories reversed. Small and mid-cap funds took in $1.97 billion after losing $2.36 billion the prior week, and US large-cap and broad market funds took in $1.34 billion after losing $1.39 billion, iShares data show. Factor and style funds went the other way, to -$1.75 billion from +$516 million, and Treasuries fell to -$803 million from +$1.27 billion.

Municipal bond, sector and thematic, and international and emerging market funds together took in $2.39 billion, against $8.68 billion the week before. That drop is why total net flow fell even as credit and broad equity accelerated. Thirteen of the 18 categories took in money.

Fixed income funds took in $4.25 billion, down from $7.00 billion the prior week, while equity funds took in $2.73 billion against $2.69 billion, according to iShares data. The $2.75 billion drop in fixed income was larger than the roughly $2.2 billion fall in total net flow, so the whole slowdown came from bonds. Fixed income has still taken in $17.70 billion over four weeks.

Assets moved differently from flows. Between Oct. 5 and Oct. 30, equity assets in the indexed series fell about 2.0% while fixed income assets rose about 2.2%, iShares data show. Equity funds had net inflows in each of the three weeks after Oct. 11, which is consistent with market moves outweighing flows in the equity asset line.

Active funds took in $234 million, down from $325 million the prior week, while index funds took in $7.31 billion, according to iShares data. The 21 active funds have had net inflows in each of the four weeks shown, $1.12 billion in total. Their share of net flow was about 3% in each of the last two weeks, so they kept taking money without gaining share.

The five largest outflows totaled $6.10 billion, more than 70% of the week's $8.64 billion in gross outflows, according to iShares data. The five largest inflows totaled $6.40 billion, about 40% of $16.19 billion in gross inflows. Money came in across 287 funds and left mostly from a handful.

Within the inflows, size mattered. HYG's $1.05 billion was about 6% of its $17.7 billion in assets on Oct. 30, while IVV's $1.40 billion was about 0.16% of its $870 billion.

Bond flows were mixed. IEF took in $1.19 billion, but TLT lost $259 million and IGOV $303 million, leaving the Treasuries category at -$803 million, iShares data show. Among the five largest inflows, SOXX, the semiconductor ETF, took in $1.06 billion, a sector position rather than core equity.

IWD, the iShares Russell 1000 Value ETF, lost $1.72 billion after averaging $146 million a week of inflows over the prior three weeks, according to iShares data. Its prior weeks were +$129 million, +$38 million and +$271 million. IWS, the Russell Mid-Cap Value ETF, lost $841 million after averaging $19 million a week of inflows.

Four funds flipped from outflows to inflows. IVV went from a three-week average outflow of $1.26 billion to a $1.40 billion inflow, iShares data show. HYG went from an average outflow of $420 million to a $1.05 billion inflow, IEF from $117 million to $1.19 billion, and IJR from $112 million to $576 million. In the Russell mid-cap family, IWR, the broad fund, took in $783 million in the week IWS lost $841 million.

The data support a move from value tilts toward broad index exposure, but one week is a thin base. IJT, the small-cap growth fund, also lost $221 million, so the outflows were not confined to value. IWD's next weekly flow will show whether its reversal persists, set against assets of $83.2 billion on Oct. 30.