Monthly ETF Fund Flows
May ETF Flows: Equities, Commodities Slapped
June 01, 2011
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Investors turned on U.S. equities and on commodities in May, as everything from $4-a-gallon gasoline to a still-declining housing market fueled sentiments that a lasting economic recovery might prove elusive. Flows out of U.S.-listed exchange-traded products were close to $1 billion and, counting the market’s losses, assets fell more than 2 percent to just shy of $1.115 trillion.
The outflows were stemmed by healthy inflows into fixed income—both U.S. and international, as well as creations in international equity, according to data compiled by IndexUniverse. Also worth noting is that year-to-date, assets in U.S.-listed ETPs are still 10 percent higher than the $1.009 trillion at the end of 2010.
The SPDR S&P 500 ETF (NYSEArca: SPY), the world’s biggest exchange-traded fund, bled almost $5 billion in assets last month, making it the leading edge of a reckoning among investors who are growing more concerned that the economic recovery is faltering. Energy prices have spiked this year, at a time when the job and housing markets remain weak and the Federal Reserve’s bond-buying program aimed at keeping borrowing rates low is about to expire.
Other heavily traded equities funds, including the PowerShares QQQ Trust (NasdaqGM: QQQ) of Nasdaq’s 100 biggest nonfinancial companies and the small-cap iShares Russell 2000 Index Fund (NYSEArca: IWM) were atop IndexUniverse’s “Biggest Losers” table. The Q’s bled $2.54 billion, while IWM had redemptions of $2.06 billion.
All of the major ETF providers except for Vanguard suffered outflows last month. But Vanguard’s inflows appear to be related to end-of-month rebalancings on a number of its U.S. equity funds. The firm doesn’t comment on its flows, but has indicated in the past that large creations and redemptions at the end of one month and the beginning of another are part of its fund-rebalancing procedures.
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