The Markets August 19, 2011

ETFs Flows Positive in July

Although ETFs remain $27.6 billion off their peak asset level from April 2011, they experienced two consecutive months of inflows in June and July ($10.0 billion and $17.3 billion, respectively), according to data from Cerulli.

Reported by

Rebecca Moore

Recovering from a $13.9 billion dip in June, total ETF assets bumped up by 1.3% to finish July with $1.1 trillion. Cerulli data show that, similar to mutual funds, U.S. stock ETFs continue to shed the most assets, declining by $4.2 billion, or 0.8%, in July. The asset class’ share shrank from 47.7% in June to 46.7% in July.

Commodities and international stock ETFs’ monthly asset growth returned to positive levels in July (11.5% and 0.4%, respectively) after two consecutive months of decline. Commodities funds attracted their highest flows in 2011 with $3.8 billion, however the category still remains in net redemptions year-to-date (-$1.5 billion).

With outflows of $21.2 million in July, balanced ETFs witnessed their first month of net redemptions in 2011. Leading outflows for the asset class was SPDR Barclays Capital Convertible Securities with $38.5 million, the ETFs’ largest month of redemptions since its inception (4/14/2009).

As the debt limit debate continued, investors shifted assets from equities to safe havens such as gold. SPDR Gold Trust grew the most assets of the top-10 largest ETFs in July, with 13.1% ($7.7 billion). Holding on to sixth place, iShares S&P 500 Index lost the most assets of the top-10 largest ETFs with $348 million.

With $5.6 billion, State Street Global Advisors moved into the top position for flows for the first time in 2011. Only two of the 10-largest sponsors lost assets in July, ProShares and Direxion Funds (-$839 million and -$550 million, respectively), according to Cerulli.