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Q2 ETF Flows: Bonds And Vanguard Rising
By Cinthia Murphy | July 06, 2012

Related ETFs: LQD / EEM / QQQ / DIA / VWO / BND

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Investors plowed significant assets into fixed-income ETFs during the 2012 second quarter and first half, as concerns about the European debt crisis continued to undermine confidence in economic recovery both in the U.S. and abroad.

Overall, total U.S.-listed ETF assets rose 11 percent in the first half of the year to $1.179 trillion, a figure which includes market movements.

Sluggish economies in much of the developed world have now prevailed for the better part of four years, and the eurozone's debt problems have helped prolong a rally in the bond market that pulled yields on 10-year Treasurys well below 2 percent to a record low in the second quarter. Yields drop when bond prices rise.

More than $18 billion of new assets found its way into domestic and international bond funds during the April-to-June period. Those inflows came as investors also trimmed exposure to riskier assets, namely equities. As an asset class, equities gathered only a net of $5.5 billion in the quarter.

Nine of the 10 biggest asset-losing ETFs in the quarter were equities funds and the 10th was a high-yield bond fund, according to data compiled by IndexUniverse.

The iShares iBoxx $ Investment Grade Corporate Bond Fund (NYSEArca: LQD) was the most popular fund, attracting $2.56 billion. The Vanguard Total Bond Market ETF (NYSEArca: BND) was No. 2 on IndexUniverse's second-quarter "Top Gainers" list, with inflows of $1.91 billion.

Year-to-date data also betrayed the bond-friendly, flight-to-safety trade, though it was less pronounced than in the second quarter. Investors poured more than $35 billion into fixed-income ETFs in the first half, with $31.26 billion going into U.S. debt funds.

All in all, U.S.-listed bond-ETF assets have surged 40 percent in the first half to $211.49 billion—a reflection of both inflows and price market action.

By contrast, upward of $37 billion found its way into equities funds in the first half of the year, but those flows represented only a 10 percent rise in total assets once market action was taken into account.

Q2 Flows & Total AUM	Net Flows ($, mm)	AUM ($, mm)	% of AUM
U.S. Equity	5,500.72	540,553.61	1.02%
International Equity	- 1,833.90	262,490.60	-0.70%
U.S. Fixed Income	16,042.95	211,491.06	7.59%
International Fixed Income	2,469.08	17,110.70	14.43%
Commodities	- 1,485.79	106,187.39	-1.40%
Currency	- 257.88	2,961.60	-8.71%
Leveraged	1,081.45	13,030.22	8.30%
Inverse	- 1,059.12	19,135.09	-5.53%
Asset Allocation	64.15	1,886.05	3.40%
Alternatives	- 107.97	4,005.74	-2.70%
Total:	20,413.67	1,178,852.06	1.73%

YTD Flows By Asset Class & Total AUM	Net Flows ($, mm)	AUM ($, mm)	% of AUM
U.S. Equity	25,356.91	540,553.61	4.69%
International Equity	11,440.41	262,490.60	4.36%
U.S. Fixed Income	31,264.87	211,491.06	14.78%
International Fixed Income	4,031.54	17,110.70	23.56%
Commodities	2,826.03	106,187.39	2.66%
Currency	- 1,168.07	2,961.60	-39.44%
Leveraged	- 443.86	13,030.22	-3.41%
Inverse	484.32	19,135.09	2.53%
Asset Allocation	304.06	1,886.05	16.12%
Alternatives	2,339.26	4,005.74	58.40%
Total:	76,435.45	1,178,852.06	6.48%

2012 Q2 Top Gainers ($, Millions)

Ticker	Name	Issuer	Q2 2012 Flows	Q2 2012 AUM ($, M)	Q2 2012 Turnover
LQD	iShares iBoxx $ Investment Grade Corporate Bond	BlackRock	2,560.17	22,680.80	14,560.78
BND	Vanguard Total Bond Market	Vanguard	1,907.66	17,387.17	6,755.64
SPY	SPDR S&P 500	SSgA	1,525.85	103,726.99	1,474,939.83
VOO	Vanguard S&P 500	Vanguard	1,437.58	4,745.14	3,552.12
BOND	PIMCO Total Return	PIMCO	1,418.32	1,723.61	2,767.70
VNQ	Vanguard REIT	Vanguard	1,388.70	13,212.14	9,409.09
VWO	Vanguard MSCI Emerging Markets	Vanguard	1,010.22	50,655.46	60,360.22
CIU	iShares Barclays Intermediate Credit Bond	BlackRock	986.42	5,523.08	1,582.92
IEI	iShares Barclays 3-7 Year Treasury Bond	BlackRock	955.72	3,231.65	2,654.43
AMJ	JPMorgan Alerian MLP ETN	JPMorgan Chase	945.00	4,867.17	4,005.66

2012 First Half Top Gainers ($, Millions)

Ticker	Name	Issuer	6/29/2012 YTD Flows	6/29/2012 YTD AUM ($, M)	6/29/2012 YTD Turnover
VWO	Vanguard MSCI Emerging Markets	Vanguard	7,454.06	50,655.46	118,565.17
LQD	iShares iBoxx $ Investment Grade Corporate Bond	BlackRock	4,958.73	22,680.80	28,955.75
HYG	iShares iBoxx $ High Yield Corporate Bond	BlackRock	3,770.89	14,743.07	37,141.46
VNQ	Vanguard REIT	Vanguard	2,626.96	13,212.14	17,498.58
BND	Vanguard Total Bond Market	Vanguard	2,624.70	17,387.17	13,934.84
VOO	Vanguard S&P 500	Vanguard	2,185.48	4,745.14	6,126.36
QQQ	PowerShares QQQ	Invesco PowerShares	2,179.15	31,936.67	411,810.91
VXX	iPath S&P 500 VIX Short-Term Futures ETN	Barclays	1,920.87	1,655.11	110,711.06
VIG	Vanguard Dividend Appreciation	Vanguard	1,797.71	11,067.02	8,480.16
DEM	WisdomTree Emerging Markets Equity Income	WisdomTree	1,702.67	3,729.43	5,176.85