September was a brutal month for equity markets around the globe, as anxiety over Europe and intensifying concerns about the growth prospects for many emerging markets hammered asset prices. The freefall in stock markets hit the bottom line of the ETF industry as well; despite another month of strong inflows, industry assets fell below the $1 trillion mark for the first time in several months. According to recent data from the National Stock Exchange, ETP assets finished the third quarter at about $973 billion, a decline of about 9% over the previous month. That slide came despite aggregate inflows into exchange-traded products of about $4.6 billion.Year-to-date inflows into ETFs totaled almost $79 billion through the first nine months, slightly ahead of the 2010 pace.
Not surprisingly, interest in bond ETFs surged in September; this asset class saw about $5.7 billion in inflows. While cash flowed out of domestic equity ETFs to the tune of about $5.3 billion, international stock funds actually saw strong cash inflows (about $2.7 billion to be exact). Just about every issuer saw a decline in total assets month-over-month; among the only firms able to buck the trend were bond fund giant PIMCO and ALPS, which saw continued interest in its MLP ETF (AMLP).
While asset totals were generally down, inflows were consistently strong across issuers. Of the four major players, only State Street saw net outflows during the month–the red there was attributable primarily to redemptions in the popular trading vehicle SPY. Vanguard continues to lead all issuers in terms of 2011 inflows; the low cost fund provider has raked in almost $28 billion through the first three quarters [see all the Vanguard ETFs here].
A few issuers enjoyed relatively strong inflows; Precidian’s September inflows represented close to 16% of August assets, while EGShares and ALPS both saw monthly inflows in excess of 5% of August ending assets.
Winners & Losers
Six ETFs saw September outflows of more than $500 million, with three topping the $1 billion mark for the month. Five of the biggest outflows came from equity funds, which were somewhat surprisingly joined by the popular safe haven BIL:
- SPDR S&P 500 (SPY): $4.0 billion
- iShares MSCI Emerging Markets Index Fund (EEM): $1.1 billion
- Energy SPDR (XLE): $1.0 billion
- Midcap SPDR (MDY): $822 million
- SPDR Barclays Capital 1-3 Month T-Bill ETF (BIL): $532 million
- Vanguard MSCI Small Cap ETF (VB): $511 million
At the other end of the spectrum, two ETFs took in more than $1 billion–including one linked to the exact same index as one of the biggest outflows. The five biggest September inflows came to:
- iShares MSCI EAFE Index Fund (EFA): $3.0 billion
- Vanguard MSCI Emerging Markets Index Fund (VWO): $1.8 billion
- Health Care SPDR (XLV): $881 million
- Vanguard Barclays Short Term Bond ETF (BSV): $822 million
- PowerShares DB U.S. Dollar Index Bullish (UUP): $707 million
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Disclosure: No positions at time of writing.
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