ETF Inflows Driven by Demand for U.S. Equity ETFs

Strategic Insight, an Asset International company, estimates that investors added $6 billion to U.S. exchange-traded funds (ETFs) in February 2011, the sixth straight month of positive flows.

Flows were driven mostly by demand for U.S. equity ETFs (growth funds). Bond ETFs – including muni-bond ETFs – saw net inflows, too.    

According to Loren Fox, senior research analyst at Strategic Insight, SI data showed equity ETF flows in February were $4.6 billion, bond ETF flows were $850 million, and currency ETF flows were $144 million.  

Net inflows in February were led by natural resources equity ETFs and commodity ETFs – supported by rising oil prices over the course of February. Diversified international emerging markets equity ETFs saw the biggest net outflows in February, sparked by a drop in emerging-markets fund performance and by rising fears of inflation.  

“At the end of February, U.S. ETF assets stood at a record $1.05 trillion – up from $1.01 trillion at the end of 2010. The consistent appeal of ETFs is remarkable. It is just a matter of when, not if, U.S. ETF assets reach $2 trillion,” Fox said in a press release.