Flight to Duration: Ultrashort Treasuries Drive Record Fixed Income Inflows

Issuer League Tables

Issuer activity on February 3 was characterized by a sharp divide between the top three industry titans, with Vanguard and iShares securing $3.87B and $3.03B in absolute inflows respectively. Conversely, State Street (SPDR) experienced a significant absolute outflow of $3.01B, deviating from its 1-month positive trend of $4.88B. On a relative basis, Tweedy, Browne Co. led all issuers with a flow equal to 14.76% of its AUM, while Horizon Kinetics faced the steepest relative decline at -7.75%. Overall, 483 brands are now competing in a market that has expanded its AUM to over $14 trillion as of this reporting period.

Issuer Flows (Absolute)

Issuer Flows (Relative)

Daily ETF Flow Analysis

Market-wide net inflows reached $7.85B on February 3, led predominantly by the Fixed Income asset class which attracted $4.72B in new capital. Equity followed with $2.40B, while Commodity ETFs saw the largest retreat with $371M in daily outflows. A deeper look into category flows reveals that Taxable Government Ultrashort funds were the primary destination for investors, capturing over $2.1B. This strength stands in contrast to the U.S. Large Cap Blend category, which suffered a $1.79B reversal during the session.

Asset Class Flows

Top/Bottom 10 Category Flows

U.S. Size & Style

The U.S. Size & Style segment was dominated by a rotate into small caps, as the Russell 2000-tracking IWM added $1.43B. This was offset by a massive $4.52B outflow from SPY, driving a total style outflow of $1.26B for the day. Value saw minor relief with $446M in net inflows, led by large-cap value names like JAVA and PVAL.

Size & Style ex-U.S.

Developed market equity ex-U.S. was a clear winner today, with the Global Ex-U.S. Large Cap – Blend category securing $1.32B in daily flows. Vanguard’s VEA led all tickers in the group with a $599M inflow, significantly outpacing its 1-week average. While Emerging Large Cap added $289M, the BBIN fund saw a retreat of $123M, highlighting a preference for broader developed market exposure over specific international beta funds.

Sector & Industry

Industrial and Financial sectors showed resilience, attracting $585M and $488M respectively during the session. The XLI fund led sectoral leaders with a $394M inflow, whereas Technology faced selling pressure. Specifically, XLK lost $450M, a move that contributes to its YTD total of $1.25B in net inflows but marks a near-term reversal in sentiment.

Region & Country

The Asia-Pacific region was the top geographic destination, securing $206M in daily flows, followed by the Eurozone with $105M. India-focused FLIN stood out with $95M in net inflows, reinforcing a strong YTD trend for emerging markets. Conversely, Canada and Japan-focused ETFs such as EWC and FLJP saw the largest regional outflows, losing $22M each.

Thematic

Thematic equity was a mixed bag, with Industrial Revolution and Infrastructure themes adding $84M and $81M respectively. In contrast, Precious Metals themes saw heavy selling, with GDXJ losing $173M despite the broader category holding over $57B in AUM. Robotics and Automation-focused ROBO managed to secure a $41M inflow, providing some balance to the divergent thematic landscape.

Fixed Income

Fixed income was the primary flow driver for the day, lead by massive interest in government securities. Ultrashort duration treasury funds like SGOV and BIL combined for nearly $2B in inflows. However, the high-yield corporate space showed some weakness, with HYG recording an outflow of $242M, contrasting sharply with the $47B in 30-day inflows seen across the broader Fixed Income asset class.

Commodity

The commodity sector saw significant profit-taking or reallocation, primarily within precious metals as GLD and SLV lost $563M and $267M respectively. This absolute decline of $565M in Precious Metals was slightly offset by a $107M inflow into Energy commodities, driven by USO and UNG. Broadly, multi-sector commodity ETFs added $32M, suggesting a shift away from pure-play metals toward diversified or energy-tilted exposure.

Cryptocurrency

Digital Asset flows were positive today at $532M, a sharp contrast to the -$1.36B seen over the past week. Bitcoin-tracking funds were the primary beneficiary, with FBTC and IBIT securing $153M and $142M respectively. While Ethereum funds added a modest $7M collectively, the ETHA ticker saw an $82M retreat, indicating that recent spot crypto interest is concentrated heavily in core Bitcoin products.

Non-Traditional

Non-Traditional ETFs experienced $481M in daily inflows, driven significantly by Synthetic Income and Buffer strategies. The Synthetic Income sub-class added $400M, while TQQQ led all non-traditional tickers with a $344M daily inflow. On the inverse side, SQQQ and AGQ saw substantial outflows of $308M and $179M respectively, as investors moved out of levered inverse equity and silver positions.

Recent Launches

The pace of innovation remains aggressive with 10 new products entering the market over the last seven days of activity. Cyber Hornet has been particularly active, launching four different strategy ETFs on January 30 alone, including the S&P 500 and XRP Strategy ETF (XXX). Notable infrastructure and multi-sector thematic funds from Harrison Street and T. Rowe Price also joined the lineup, though many of these initial listings are still building their seed AUM levels.