U.S. ETF assets declined slightly in November according to the latest data from the National Stock Exchange, as the rapidly-growing industry experienced net outflows amidst a general flight from both domestic and international equities. The industry finished last month with $1.06 trillion in net assets, down about 2% from the previous month but up 12% from the same period last year. The net decline in assets was attributable to domestic equity ETFs, which saw $7 billion in outflows, and international equities, which saw another $1.9 billion. Those big losses were offset by tremendous interest in commodities and bonds; fixed income ETFs raked in more than $5 billion in cash inflows, while exchange-traded commodity products captured almost $2.9 billion [see Ten Unexpected Observations In YTD Returns].
Four ETFs saw outflows of at least $1 billion on the month–all of them domestic equity funds. The S&P 500 SPDR (SPY) saw assets decline to about $86 billion after almost $4.6 billion went out the door. SPY was followed by two iShares ETFs, including the iShares Russell 2000 Index Fund (IWM, $3.5 billion) and iShares S&P 500 Index Fund (IVV, $1.5 billion). The Financial SPDR (XLF) had net redemptions of about $1.4 billion.
Three ETFs saw net inflows in excess of $1 billion, led by the physically-backed Gold SPDR (GLD) which raked in $3.1 billion. GLD was followed by the Vanguard MSCI Small Cap ETF (VB, $1.2 billion) and Vanguard Barclays Total Bond ETF (BND, $1.0 billion). Those two Vanguard ETFs experienced tremendous growth last month; the November inflows represented a whopping 31% of VB’s assets at the end of October (that figure was a more moderate but still impressive 8% for BND).
Vanguard led all issuers in November inflows, taking in about $5.5 billion during the month. State Street saw about $5 billion in outflows, though excluding SPY and XLF there was a net movement into the company’s lineup of ETFs. Beyond the industry’s largest issuers, a few other firms enjoyed some impressive relative success in November. Direxion, the firm known for leveraged and inverse ETFs that recently launched some insider sentiment ETFs, took in about $440 million–or 6% of the previous month’s assets. Inflows to AdvisorShares ETFs were equal to about 12% of October AUM, led by strong interest in the Active Bear ETF (HDGE).
Russell, the index provider that has recently made a more direct push into the ETF space, had perhaps the best November. Assets jumped by about 60% last month, as investors embraced the lineup of investment discipline and factor ETFs debuted by the company throughout 2011. The Russell lineup consists of funds such as the Russell 1000 Low Volatility ETF (LVOL), which targets stocks that have historically exhibited low volatility, and the Small Cap Contrarian ETF (SCTR), which maintains a portfolio consistent with a contrarian investment style [see Low Volatility ETFdb Portfolio]. The Russell ETFs essentially offer cheap, low maintenance access to a wide range of investment strategies–along with all the benefits of the exchange-traded structure [see Six Noteworthy ETF Innovations].
A couple of closely-watched matchups among similar ETFs featured reversals of current trends in November. The iShares COMEX Gold Trust (IAU), which offers access to physical gold at a lower price point than GLD, saw the gap widen to its much larger competitor. IAU’s haul of $345 million was impressive, but dwarfed by the $3.1 billion taken in by GLD [try our Free Head-To-Head ETF Comparison Tool].
Another head-to-head matchup in the emerging markets ETF space also saw an interesting development last month, as the ultra-popular Vanguard MSCI Emerging Markets ETF (VWO) saw about $630 million go out the door. iShares’ EEM, which is linked to the same index, lost just $144 million. VWO is considerably younger than EEM, and at one point maintained assets equal to only a fraction of its more established competitor. But thanks to a wide expense differential, VWO has surged ahead and is now by far the largest product in the Emerging Markets ETFdb Category. Even after the outflows in November, VWO has taken in about $7.7 billion through the first 11 months of the year. EEM has seen outflows of about $7.2 billion [see Special Report: Emerging Market ETFs In Focus].
One other item of note among competing ETFs; the Vanguard Barclays Total Bond ETF (BND) had pulled into a near tie with the iShares Barclays Aggregate Bond Fund (AGG). Both ETFs are linked to the Barclays Capital U.S. Aggregate Bond Index, but BND (0.11%) has a big expense advantage over AGG (0.22%). Schwab’s SCHZ, which also tracks the same index and charges just 0.10%, finished the month with just $143 million in assets.
Disclosure: No positions at time of writing.
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