July ETF Report: Winners And Losers

by on August 11, 2009 | Updated August 12, 2009

July was a great month for U.S. equity markets, with that strong performance giving yet another boost to the ETF industry. According to the July data released by the National Stock Exchange (NSX), total ETF/ETN assets increased from about $598 billion in June to more than $643 billion in July, with net cash flows of more than $13 billion for the month. Among the other highlights on the monthly report:

  • The rich get richer: The four largest issuers all saw big increases in assets in July, including iShares (up 8.8%), State Street (6.0%), Vanguard (12.1%), and Invesco PowerShares (10.9%).
  • Leveraged ETFs suffer: Leveraged ETFs, which had seen very strong inflows for much of 2009, suffered a bit of a setback last month, likely related to an avalanche of bad press (a lot of it misleading) and suspension of sales by a number of major broker-dealers. ProShares and Direxion saw outflows of $537 million and $882 million, respectively, during July. Long leveraged ETFs saw cash outflows of $2.6 billion, while short leveraged funds actually saw inflows of $1.1 billion. Despite a weak month, ProShares and Direxion have attracted significant cash flows year-to-date, bringing in $12.0 billion and $7.3 billion, respectively.
  • U.S. Commodities sees a jump: The big winner for the month was U.S. Commodity Funds, which saw net inflows of $1.2 billion for the month. Almost all of these flows were attributable to the United States Natural Gas Fund (UNG), which has swelled in size despite tumbling natural gas prices. Growth in UNG has been halted (at least temporarily) as the CFTC looks into the role that speculators are playing in energy markets.

Heads Above Water

After a strong month of July, six of the top 10 ETF issuers now have assets above their totals from a year ago:

Issuer July 2008 July 2009
iShares $299.0 $317.3
State Street $143.2 $152.1
Vanguard $48.7 $66.4
PowerShares $37.4 $36.5
ProShares $20.5 $26.2
Van Eck $6.0 $8.3
BONY $8.4 $7.2
U.S. Commodity Funds $2.0 $6.9
Rydex $6.2 $5.1
Merrill (HOLDRS) $6.1 $5.1

As we head through the dog days of August, the ETF industry will try to keep its hot streak going with another month of strong asset inflows.

Disclosure: No positions at time of writing.