Monthly ETF Fund Flows
Oct. ETF Flows: Investors Brave Equities
November 01, 2011
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Investors poured almost $24 billion into U.S. ETFs in October, and into domestic and international equity funds in particular, as investors braved the continuing risk-on/risk-off volatility linked to Europe’s debt crisis. Including market movements, ETF assets rose 11 percent last month and more than 13 percent in the past year to almost $1.082 trillion.
The iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM) was last month’s most popular ETF, pulling in $3.77 billion in new assets. The No. 2 ETF was the iShares MSCI Russell 2000 Index Fund (NYSEArca: IWM), which hauled in almost $3 billion. Flows into the two funds were a big reason iShares, the world’s biggest ETF company, gathered more assets than any other ETF company last month, according to data compiled by IndexUniverse.
The strong flows into equities reflected a cautious—if also premature—optimism that eurozone policymakers would take bold enough steps to meaningfully address the continent’s debt crisis, which has been a concern in markets for nearly two years. Still, the region is hardly out of the woods, as Greece’s plan to submit a recently proposed rescue package to its citizens for approval indicates.
Lingering doubts about Europe’s will to work through its debt problems could be seen in the fact that the iShares MSCI EAFE Index Fund (NYSEArca: EFA), a fund focused on developed-market equities apart from those in the United States and Canada, was the No. 10 ETF on IndexUniverse’s “Biggest Losers” table last month. EFA suffered redemptions of $278.1 million, and ended October a $38.14 billion fund.
ETF inflows this year through October are now more than $100 billion, though total assets, including market movement, have risen 6.7 percent from the $1.009 trillion at the end of 2010.
That year-to-date rise in assets is less than the 11 percent gain in October—a reflection of how much volatility has been in the market in the past year, particularly in connection with Europe’s sovereign debt crisis. As noted above, including market movements, assets have risen more than 13 percent in the past year from $940 billion at the end of October 2010.