August ETF Stats: Keeping The Winning Streak Alive (Just Barely)

by on September 8, 2011 | ETFs Mentioned:

Total ETF assets declined by almost 4% in August thanks to abysmal performances from equity markets around the globe. But the industry kept its monthly winning streak alive, managing to generate net inflows of about $2 billion during one of the worst months performance wise since late 2008. Not surprisingly, fixed income ETFs saw a surge in interest; inflows to bond products during the month topped $4.7 billion according to the latest statistics from the National Stock Exchange. And while investors fled from international stock markets (to the tune of net outflows of about $5.6 billion), U.S. equity ETFs actually saw net inflows. One interesting figure was the size of net inflows into long leveraged U.S. equity funds; this corner of the market took in more than $3 billion in new cash.

The ETF industry has enjoyed three consecutive months of net inflows; May saw about $1 billion in net outflows.

A look at the list of individual ETFs showed some interesting trends. The Gold SPDR (GLD) briefly became the largest ETF in the world during August as gold prices skyrocketed and equity markets were in freefall. But by the time the month drew to a close, GLD was some $20 billion behind the S&P 500 SPDR (SPY) which has traditionally held the title of  “World’s Largest ETF.” SPY had assets of about $91.8 billion at the end of August, while GLD finished the month with about $71.8 billion. SPY had slipped to about $75 billion at one point, but a wave of creations pushed up asset levels sharply by the end of the month [see all the ETFs tracking the S&P 500 here].

Gold ETFs: IAU Gaining Ground

Though SPY lost more than 5% in August, the fund saw net inflows of about $3.7 billion. And despite the surge in gold prices, GLD actually saw net outflows during the month of more than $1.7 billion. Interestingly enough, GLD was the only one of the four physical gold ETFs that saw outflows during August; SGOL raked in about $94 million, while AGOL held steady. The iShares COMEX Gold Trust (IAU) finished the month with about $9.7 billion, an increase of nearly 20% month-over-month.

Since the beginning of 2011, IAU has seen aggregate inflows of about $2.5 billion; GLD has bled almost $2 billion during that stretch. The shift towards IAU may be attributable in large part to the meaningful cost differential; IAU charges 0.25% while GLD charges 0.40%. Since the underlying holdings are identical–both hold bars of gold bullion–that means that IAU is essentially guaranteed to outperform GLD over the long run.

IAU, with $9.7 billion at the end of August, is now the 18th largest U.S.-listed ETF. A year ago the fund had about $3.8 billion and was number 45 on the list [see ETF Research Report: Gold ETFs In Focus].

Big Winners And Losers

SPY’s $3.7 billion led the way in August, followed by a number of assets that generally have appeal in tumultuous environments:

  • SPDR 1-3 Treasury Bill ETF (BIL): $2.1 billion
  • Market Vectors Gold Miners ETF (GDX): $1.6 billion
  • Utilities SPDR (XLU): $1.3 billion
  • Consumer Staples SPDR (XLP): $1.0 billion

BIL’s appeal as a safe haven was particularly noteworthy; August inflows represented more than 200% of assets at the end of July. Other ETPs that saw big relative growth included the VelocityShares Inverse VIX ETN (XIV), which plummeted during the month but took in more than $550 million in inflows. Another VelocityShares ETN had an interesting story during the month; the 2x VIX Short-Term ETN (TVIX) experienced outflows of more than 100% of the prior month’s AUM total. But thanks to a skyrocketing value–TVIX was up about 135% last month–the ETN still finished August with about $100 million in assets [see Volatility ETFs: The Real Safe Haven?].

In addition to GLD, three other ETFs saw more than $1 billion in outflows in August:

  • MSCI Emerging Markets Index Fund (EEM): $1.5 billion
  • PowerShares QQQ (QQQ): $1.3 billion
  • Financial SPDR (XLF): $812 billion
  • S&P 500 VIX Short Term Futures ETN (VXX): $770

Gaining On iShares

iShares’ status as the market leader in the U.S. ETF space took another hit in August, as the company’s market share slid to less than 42% (one year ago, iShares accounted for more than 46% of total ETF assets. iShares led all issuers with outflows of nearly $5 billion in August, while Vanguard took in about $1.9 billion and State Street hauled in more than $4 billion. Not surprisingly, the volatility of August was good to the issuers of leveraged ETFs; ProShares took in about $1.7 billion, while Direxion raked in nearly $2.4 billion.

Merrill Lynch’s lineup of HOLDRS products saw outflows of about $115 million during August; the company announced during August that six of those products will be converted to Van Eck ETFs and the remaining 11 will be shuttered at some point in the fourth quarter [HOLDRS Headed For Extinction?].

A handful of smaller issuers enjoyed strong inflows amidst the chaos in August. PIMCO’s monthly inflows totaled more than 7% of the previous month’s assets. ALPS’ inflows amounted to about 4% of July AUM and WisdomTree, which recently listed its shares on the NASDAQ, continued to demonstrate strong growth.

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Disclosure: No positions at time of writing.