ETFs Gain Assets Overall; Leveraged ETFs Lose Assets

Exchange-traded fund (ETF) assets rose $47.4 billion, or 8%, in July, according to State Street Global Advisors (SSgA).

As of July 31, assets in the U.S. ETF industry totaled $640 billion. A total of 751 ETFs in were managed by 27 ETF managers, according to the SPDR ETF Snapshot for July 2009 from SSgA, a manager of ETFs.

Eleven of the 12 categories of ETFs gained assets. The International category saw the most inflows, rising the most in absolute and percentage terms, up $16.6 billion, or 12.6%.

Inverse/Leverage was the only category to lose assets, down $1.9 billion, according to the report. Leveraged ETFs have come under criticism by the Financial Industry Regulatory Authority (FINRA) for being unsuitable for retail investors. Morgan Stanley Smith Barney recently joined Edward Jones and UBS to stop the sale of the instruments (see “MSSB Bans Leveraged ETF Sales”).  

ETFs also gained assets across style/size and sector for the most part. By size/style, assets were up $19.4 billion, or 9.1%. Gains were spread evenly across categories with seven gaining in double-digit percentage terms.

Most of the 10 sectors saw asset gains, but Consumer Staples saw a decline. Assets are up 17.2% overall, with Materials seeing the largest year-to-date gain (69.2%). Other big asset percentage changes were seen in Consumer Discretionary (50.8%) and Technology (63.7%).