November ETF Data: Narrowing The Gaps

by on December 6, 2010 | ETFs Mentioned:

November was yet another solid month for the ETF industry, as total assets climbed to about $947 billion according to data released by the National Stock Exchange. That represented an increase of less than 1% from October, as declines in asset prices partially offset another month of strong inflows. Total inflows were about $11 billion last month, down slightly from the October haul of $13 billion. Domestic equities, which turned in strong performances relative to international stocks in November, saw the biggest growth, taking in about $6 billion. International equity ETFs took in about $3.6 billion, while commodity products also saw a surge in interest, with $1.7 billion in inflows.

Vanguard continues to gain ground on its larger competitors, as the Valley Forge, Pennsylvania-based firm accounted for more than half of the industry’s total inflows in November. Vanguard’s market share is now close to 15%, up from less than 12% just one year ago. Vanguard, which has thrived thanks in part to the low expense ratios its funds offer, saw cash inflows equal to about 5% of the prior month’s assets. By comparison, inflows to iShares funds represented only about 0.3% of prior month assets while State Street saw outflows on the month [see all the Vanguard ETFs here].

The most impressive relative gains came from the smaller ETF issuers. PIMCO took in more than $500 million last month, or almost 30% of October assets. The actively-managed money market alternative MINT accounted for the bulk of those inflows, growing to more than $800 million as anxious investors sought out safe places to park cash. Global X turned in another impressive month, taking in about $250 million, or 30% of the prior month’s assets. The company launched three products in November, including a Uranium ETF (URA) that has already grown to nearly $100 million. EGShares, the only ETF issuer to focus exclusively on emerging markets products, also saw growing interest for its products. The firm’s nine ETFs took in more than $100 million, or almost 40% of aggregate assets at the end of October. ALPS also saw a big jump in assets, thanks to tremendous interest in its one-of-a-kind MLP ETF [see MLP ETFs vs. MLP ETNs]. AMLP has grown to more than $400 million in assets since its launch in August.

Eye On Head-To-Head Matchups

November marked another giant step in one of the most closely-watched head-to-head battles in the ETF space. The Vanguard Emerging Markets ETF (VWO) took in $1.7 billion last month, the best total of any U.S.-listed ETF. The iShares MSCI Emerging Markets Index Fund (EEM), on the other hand, saw more than $600 million of outflows. Both ETFs replicate the MSCI Emerging Markets Index, and EEM has long been the largest fund in the space. But over the last year VWO’s assets have steadily climbed from about $18 billion to more than $41 billion, thanks in part to a competitive expense ratio (VWO charges just 0.27%, compared to 0.72% for EEM). The iShares emerging markets fund finished November with about $46 billion, suggesting that it could soon be overtaken.

Another interesting head-to-head matchup also saw the more cost efficient option gain ground in November. The SPDR Gold Trust (GLD) saw outflows of about $270 million, while the iShares COMEX Gold Trust (IAU) took in more than $200 million on the month. Earlier this year iShares cut the expense ratio on its physically-backed gold fund from 0.40% to 0.25%, and also implemented a 100% daily allocation feature. GLD, the second-largest ETF by total assets with about $57 billion, charges 0.40% [see Emerging Market ETFs: Seven Factors Every Investor Must Consider].

Of the twelve largest ETFs by total assets nine saw cash outflows last month, led by the S&P 500 SPDR (outflows of nearly $2 billion).

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Disclosure: No positions at time of writing.