In the first half of 2015, international equity ETFs garnered $90 billion of fresh money according to etf.com data, the lion’s share of the industry’s $101 billion of net inflows. However, because the various products that provide non-US exposure seek to track different indices, S&P Capital IQ encourages clients to look inside at the holdings. During June, we learned that Vanguard international ETFs will be adding China A-shares and Canadian equities to some of its more popular FTSE-based products. As we noted in a popular Trends & Ideas article, this will make these ETFs perform differently than the iShares offerings that track MSCI indices.
Meanwhile, $23 billion went into fixed income ETFs, even as investors have been preparing for a pending Federal Reserve decision to raise interest rates. As we noted in a separate article, we think some of the inflows to bond ETFs is the result of investor frustration that actively managed mutual funds in certain styles generate inconsistent performance records. Indeed, just 25% of intermediate-term government and high-yield mutual funds that outperformed peers in one 12-month period maintained that outperformance in the two subsequent periods.
In June, S&P Capital IQ hosted a client event that highlighted the health care sector’s two largest industries: biotechnology and pharmaceuticals. Click here for the highlight reel. In a related article, we discussed the catalysts for the biotech industry and the holdings and cost differences between some of the larger ETFs.