ETFs See Inflows of $12B in April

Investors poured $12.2 billion into exchange-traded funds (ETFs) in April 2010, bringing total year-to-date net inflows to $19.9 billion, according to Morningstar Direct Fund Flows.

Flows were positive for all asset classes in April, which helped tip all of the asset classes into the black for the year-to-date period as well.

Within domestic equities, large-cap funds as a whole suffered outflows of about $1.5 billion for the month, thanks to steep outflows of roughly $4.6 billion from SPDR S&P 500 SPY. On the other hand, mid-cap ETFs attracted roughly $975.5 million in net new assets in April and small-cap ETFs took in another $1.9 billion. 

Taxable Bond ETFs had another solid month of inflows in April. Whether in Treasuries or corporate credits, investors decidedly favored the short end of the yield curve, Morningstar noted. Short-term bond funds led the asset class with about $517.1 million in net inflows (following $852.8 million in net inflows in March), and Short Government ETFs added another $123.6 million in net new assets last month, following record net inflows of more than $1.9 billion in March. 

After experiencing net inflows of more than $1.6 billion in the first two months of the year, inflation-protected bond ETFs have seen demand drop off. More than $111 million exited the category in April—the first monthly outflow since August 2007. 

Investors poured more than $2.4 billion into diversified emerging-markets ETFs last month. Foreign large-blend also saw healthy inflows of roughly $1.1 billion in April. ETFs covering Pacific/Asia ex-Japan stocks saw strong demand as well, pulling in some $863 million for the month. 

In the year-to-date period through April, Vanguard has seen about $11.8 billion in total net inflows into its ETFs, leading all U.S. ETF providers by a significant margin, according to Morningstar’s data. iShares comes in second with roughly $7.1 billion in year-to-date net inflows.  

The industry’s number two provider by assets—State Street Global Advisors—hasn’t fared as well, seeing outflows of about $9.6 billion year-to-date. 

Vanguard has more than doubled its ETF assets over the past year, from about $51 billion in April 2009 (9.6% market share) to more than $109 billion (13%) through April 2010, according to Morningstar. The other two providers have also seen their assets grow robustly, thanks to strong market performance, but their market shares have fallen. iShares’ assets have increased to $397 billion from $261 billion over the past year, but its market share has dropped to 47.2% from 48.9%. Similarly, SSgA’s assets have grown to $200 billion from $140 billion over the past 12 months, but its market share has fallen to 23.8% from 26.3%. 

Morningstar’s complete report is available at