ETF Flows Boosted in June

Strategic Insight, an Asset International company, estimated that investors poured an additional $10.6 billion into U.S. ETFs in June, after $4.5 billion net inflows in May.

U.S. equity and taxable bond ETFs led the way in flows, posting a net $4 billion and $3.5 billion, respectively. International equity saw a net inflow of $2.5 billion.   

In the second quarter of 2011, total net inflows to ETFs were $30.5 billion, up slightly from the $27.7 billion of net inflows in Q1 2011. This put ETFs on pace for their fifth straight year of $100 billion or more in net inflows. At the end of June, U.S. ETF assets totaled $1.09 trillion, down from $1.11 trillion at the end of May due to market performance.   

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“We continue to believe that ETFs in the U.S. will reach $2 trillion in assets before 2016,” said Loren Fox, a senior research analyst at Strategic Insight.

ProShares Launches Hedge Replication ETF

ProShares released an exchange-traded fund that seeks to provide hedge fund benefits without the same investment challenges.

The ProShares Hedge Replication ETF is listed on NYSE Arca under the ticker symbol HDG.

According to ProShares, the fund aims to provide the risk/return characteristics of a broad universe of hedge funds without many of the challenges of hedge fund investing, such as illiquidity, limited transparency and high fees. The fund’s benchmark is based on Merrill Lynch’s hedge fund replication model.

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“Many portfolios could benefit from the risk/return characteristics of hedge funds, but investors often either can’t or don’t invest in hedge funds because of a variety of challenges,” said Michael L. Sapir, Chairman and CEO of ProShare Advisors LLC, ProShares’ investment adviser.  “We are pleased to offer an ETF that addresses challenges of hedge fund investing and may be, for many investors, an attractive alternative to hedge funds.”

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