Industry Updates

ETF investors remain positive despite equity market stumble

George Geddes

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The S&P 500 has been on a downward spiral for its second week as a result of the US-China trade war reaches more conflicts. Last week saw

ETFs exposed to China fall

following President Donald Trump threatening to increase tariffs on all Chinese imports.

But investors are still buying S&P 500 ETFs despite the products being some of the worst performing last week. The iShares Core S&P 500 had inflows of $404.4m, despite seeing its Net Asset Value (NAV) fall 2.1%, according to data sourced by Ultumus.

The newly launched iShares ESG MSCI USA Leaders ETF (SUSL) pulled in $849.5m in its first week, all while its NAV fell 1.5% over the same period.

Donald Trump has taken to social media to try and comfort the markets saying the relationship between the US and China is positive.

President Trump said in a tweet: “The United States and China have held candid and constructive conversations on the status of the trade relationship between both countries. The relationship between President Xi and myself remains a very strong one.”

It is a mixed story in the UK, however. The Lyxor FTSE 100 UCITS ETF (L100) and the iShares FTSE 100 UCITS ETF (CSUKX) saw their NAVs both fall 2.9%. L100 saw net flows of -$7.5m, resulting in its assets under management (AUM) fall 5.1%, the largest drop of any FTSE 100 ETF. But CSUKX managed to attract $18.7m, cushioning its AUM change to only -0.1%.

It is likely the S&P 500 ETFs’ performances are not going to be bouncing back this week either following China’s response to the US tariff hike. China said yesterday it will be implementing a tariff hike of its own on US goods worth $60bn starting 1 June. The S&P 500 fell a further 2.4% yesterday in response to the news.

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