International stock ETFs drew nearly double the new money of U.S. large-cap funds in September, according to FactSet's monthly ETF summary.
Key Takeaways:
- Foreign stock funds pulled in almost twice the September inflows of U.S. large-cap funds.
- Utilities and financials sector funds gained assets while energy and industrials funds saw the biggest outflows.
- Most new launches were active, yet passive funds still captured 60% of the month's new money.
The global ex-U.S. total market segment, which covers stocks outside the U.S., led all equity groups. At the same time, investors pulled money from global semiconductor funds, FactSet's Lois Gregson wrote.
Funds in that segment include the Vanguard Total International Stock ETF (VXUS). It holds developed and emerging market stocks and charges a 0.05% expense ratio, or annual fee, according to ETF Database.
That shift came during a slower month. U.S.-listed ETFs added $140.9 billion in September, down 29.6% from $182.6 billion in August, FactSet reported. Total assets held roughly flat at $16.4 trillion.
Even so, year-to-date flows reached a record of more than $1.5 trillion. Where September's money landed points toward caution, though. Gregson wrote that investors "may be prioritizing capital preservation, income generation, and reducing cyclical risk over aggressive growth."
Every asset class posted net inflows, per FactSet. Stocks took 46.8% of September's total and bonds took 41.4%. Currency, alternative, and asset allocation ETFs split the remaining 11.8%.
Still, stock inflows of about $66 billion were the lightest in FactSet's 12-month chart.
Where September's ETF Money Went
Sector funds tilted defensive. The State Street Utilities Select Sector SPDR ETF (XLU) led with $943 million in new money, FactSet data show.
In financials, the State Street Financial Select Sector SPDR ETF (XLF) added $516 million after losing $3.74 billion in August, according to FactSet.
Energy saw the largest outflow, as the State Street Energy Select Sector SPDR ETF (XLE) shed $722 million. Industrials, consumer staples and materials funds also lost money, per FactSet.
Investors also pulled $135.5 million from the State Street Technology Select Sector SPDR ETF (XLK). Global semiconductor funds lost money as well, according to FactSet.
See more: XLK Hits New All-Time High as Tech Triumphs
On the bond side, U.S. government ultra-short term funds, which hold debt due within about a year, again gathered the most money, according to FactSet. Corporate, broader U.S. government, mortgage-backed and emerging market government bond funds led outflows.
Fund companies launched 106 ETFs in September, and 75% were actively managed. That pushed the year's total to 1,129 launches, according to FactSet.
Investors, however, sent 60% of September's new assets to passively managed ETFs. Gregson noted that lean matches year-to-date flows.
The month's biggest debut was the State Street SPDR UC Investments 90/10 Endowment Strategy Index ETF (UCBG). State Street Investment Management launched it with a $2.5 billion investment from the University of California, FactSet said.
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