ETFs Gather Over $4 Billion in May as Bonds Favored

June 5th at 11:19am by Tom Lydon

The Eurozone grumbling sapped investor confidence, stoking a “risk-off” sentiment and compressing the exchange traded fund universe, as investors dumped equities and commodities in favor of safe-haven fixed-income assets.

At the end of May, total assets in U.S.-listed ETFs and exchange traded notes stood at $1.14 trillion, up 2% over the same month last year, but still a drop from the $1.20 trillion in assets at the end of April, according to the ETF Industry Association.

“Investors poured an estimated $4.2 billion into U.S.-listed exchange-traded funds and notes during the month of May, bringing total year-to-date inflows into exchange-traded products to $63.1 billion,” according to Bank Investment Consultant. “That’s up 21% from the $49.68 billion ETFs and ETNs received in inflows during the first five months in 2011 and more than twice the $27.57 billion they received in 2010.”

Among the top three fund providers, Vanguard, bringing in $6.6 billion in net inflows, continues to attract investor assets. Meanwhile, BlackRock’s iShares lost $642 million in assets and State Street Global Advisors bled out $1.8 billion. Combined, these three providers make up $947 billion in ETP assets. [Vanguard, Bond Funds Dominating ETF Flows]

Over May, U.S. equity ETPs diminished $328 million and long global/international equities lost $3.3 billion. About $1.5 billion was also drained from long commodity ETPs. In contrast, long fixed-income assets attracted in $8.9 billion in new assets. Fixed-income ETPs have brought in over $30.2 billion in new cash year-to-date.

ETFs with the highest net cash inflows include those that track safe-haven bonds, like the Vanguard Barclays Total Bond Fund (NYSEArca: BND), which added $1.2 billion, and the iShares Barclays 1-3 Year Treasury Bond Fund (NYSEArca: SHY), which gained $1.1 billion. Meanwhile, the riskier iShares MSCI Emerging Markets (NYSEArca: EEM) lost $1.5 billion, the small-cap iShares Russell 2000 (NYSEArca: IWM) dwindled by $1.0 billion and the speculative-grade iShares Barclays Capital High Yield Bond Fund (NYSEArca: JNK) dropped by $1.2 billion.

ETPs experienced inflows of about $4.2 billion for the month of May, making the total year-to-date cash inflow $63.1 billion.

As of the end of May, there were 1,465 U.S.-listed ETPs, compared to the 1,254 listed products for the same month last year, or a 17% increase in new funds.

For more information on ETF assets, visit our ETF performance reports category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.