The latest figures for the ETF industry are out, and the numbers continue to impress. ETF assets finished the first half of the year at just under $788 billion, down about $10 billion from the previous month. But that decline was attributable primarily to sinking asset values; cash inflows for the month of June totaled $12.4 billion, about twice May’s level. In a reversal of recent months, domestic equities saw big inflows in June, taking in $3.6 billion. By asset class, that figure trailed only fixed income ETFs, which hauled in nearly $5 billion in June and have now seen more than $18 billion in inflows on the year.
From an issuer perspective, June was a great month for the industry’s biggest players; the vast majority of the inflows on the month were into funds offered by iShares, State Street, and Vanguard. Charles Schwab, which announced expense ratio cuts to most of its product line last month, took in $124 million, or an impressive 11% of May assets. Among the smaller issuers, June was a great month for Global X, which saw inflows of $29 million, or almost 14% of May assets.
Fund By Fund
A look at the fortunes of individual ETFs in June reveals a number of interesting trends. In the closely-watched battle between the big emerging markets ETFs, EEM finally won a round. The iShares fund took in $1.6 billion on the month, while Vanguard’s VWO took in $795 million. Both ETFs track the MSCI Emerging Markets Index, but VWO’s expense ratio is considerably lower (0.27% compared to 0.72% for EEM). Investors have gravitated towards VWO over the last year, as EEM saw cash outflows in the first half of the year [see Five Key Differences Between EEM and VWO].
One of the big losers on the month was PIMCO’s Enhanced Short Maturity Fund (MINT), an actively-managed ETF that offers money market like exposure. After taking in more than $800 million over its first six month–including a mind-boggling $600 million during a tumultuous May–MINT took a step back in June with outflows of about $126 million [see How MINT Raked In $800 Million]. The biggest outflows on the month belonged to the MSCI Brazil Index Fund (EWZ, $521 million) and the Financial SPDR (XLF, $636 million).
Interest in gold ETFs continued to build in June; GLD took in more than $2 billion, while the iShares IAU saw inflows of $67 million and ETF Securities’ SGOL experienced $86 million of net creation activity. Assets in those three funds now stand at more than $55 billion, making ETFs among the largest holders of gold bullion in the world.
Another interesting winner in June was the iShares Barclays 20+ Year Treasury Bond Fund (TLT), which took in $553 million, or more than 20% of May assets. As expectations for a prolonged period of record low interest rates have solidified, long term bonds have come back into favor.
Disclosure: No positions at time of writing.