Precious-metals prices are surging, but investors pulled about $3 billion from the largest gold exchange traded fund (ETF) in the first quarter, research shows.
Overall, flows into ETFs were steady in the first quarter despite the ups and downs of market sentiment.
For the first quarter of 2011, inflows into U.S. ETFs were modestly positive, according to CovergEx, with $27.7 billion added to U.S.-listed ETFs. The iShares MSCI Japan (NYSEArca: EWJ) topped the asset-gathering charts, with $2.8 billion in new capital. [Japan ETFs Experience Record Inflows In Just A Week.]
Meanwhile, SPDR Gold Shares (NYSEArca: GLD) unexpectedly lost around $3 billion. [Tom Lydon Talks Gold ETFs On CNBC.]
Some observers believe the capital found its way into agriculture-based ETFs like PowerShares DB Agriculture Fund (NYSEArca: DBA) and Market Vectors Agribusiness ETF (NYSEArca: MOO). [Agriculture ETFs Harvest Gains.]
ETF investors also took out $9.3 billion from iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM), and analysts note that the money may have flowed into the Vanguard MSCI Emerging Markets ETF (NYSEArca: VWO) and other emerging country-specific plays. Nevertheless, emerging markets have recently drawn significant investor interest, with EEM garnering around $1 billion in the last week. [Emerging Markets ETF Is A Buy, Goldman Says.]
The majority of funds that experienced inflows were ETFs based on passive indexing with no leverage component, with over 90% of ETF investors’ incremental capital put into these products over the last quarter.
Max Chen contributed to this article.
For full disclosure, Tom Lydon’s clients are invested in GLD.