December ETF Data: Out With A Bang

by on January 6, 2010 | ETFs Mentioned:

So much for a slow December.

The latest National Stock Exchange numbers are out, and December was one of the best months on record for the ETF industry. Total cash inflows totaled nearly $30 billion, as investors flocked to domestic equities in the final month of the year. Nearly every issuer saw a big jump in assets in December, led by State Street, iShares, and PowerShares. Total ETF assets increased to $790.9 billion, an increase of more than 5% over November’s totals. 

Issuer Highlights

In dollar terms, State Street and iShares had the best month, as assets for these issuers increased by $14.8 billion and $11.6 billion, respectively. But several of the industry’s smaller players continued to post big gains as well. Global X saw assets grow by more than 600% following the launch of five sector-specific China ETFs on the month (read an interview with Global X CEO Bruno del Ama here). Several of the new funds had already accumulated major assets: CHIX had $32 million in assets while CHII closed the year at $26 million. After leading the industry in cash inflows in December, Vanguard followed with a relatively weak December, taking in only $1.9 billion, the majority of which was attributable to VWO.

Schwab also continued its steady push into the industry, launching two new funds and growing total assets by more than 140% for the month. Among firms with under $1 billion in assets, seven posted month-over-month asset increases of more than 10%, including Emerging Global Advisors, PIMCO, RevenueShares, Greenhaven, and ALPS. Among the $1 billion plus issuers, USCF (+17%), First Trust (+15%), and PowerShares (+11%) posted the biggest asset increases.

Fund Highlights

After seeing more than $30 billion flow out of the SPDR S&P 500 (SPY), the biggest U.S.-listed ETF saw more than $11 billion in inflows in December, accounting for a significant portion of industry gains on the month. SPY was one of five funds to take in more than $1 billion in December, joined by the Vanguard Emerging Markets ETF (VWO), iShares Russell 200 Index Fund (IWM), SPDR Utilities (XLU), and the PowerShares DB U.S. Dollar Index Bullish (UUP). Monthly inflows into UUP were 127% of the fund’s value at the end of November, as total assets jumped from $1.4 billion to $3.2 billion, presumably as investors sought to hedge themselves against a continued rally in the U.S. dollar (read more about WisdomTree’s new hedged ETF here).

2009 In Review

Total ETF assets increased from $539 billion at the end of 2009 to nearly $791 billion at the close of 2009, growth of about 47% on the year. iShares continued to dominate the ETF industry, holding its market share steady at approximately 47%. But competition continued to increase, as a number of new sponsors entered the game. Eleven issuers who had no assets at the beginning of the year accumulated more than $1.5 billion by the end of December.

Despite nearly $20 billion in inflows in December, U.S. equity funds finished the year in the red, as long ETFs saw $8.5 billion in cash outflows and long leveraged domestic funds lost $7.1 billion. Fixed income ETFs surged in 2009, taking in more than $42 billion. Commodities ($30 billion) and international equities ($35 billion) also saw big jumps, as did short leveraged funds ($11.5 billion).

At year end, 125 ETFs had at least $1 billion in assets, with these funds accounting for more than 85% of total assets.

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Disclosure: No positions at time of writing.