The favorable economic conditions that helped propel the S&P 500 to the highest levels since 2008 last month also fueled greater interest in emerging market and corporate debt exchange traded funds.
According to the ETF Industry Association, total assets in ETFs and exchange traded notes increased by $13.9 billion for the month of February 2012 to $1.2 trillion, up about 14% year-over-year. Additionally, year-to-date net cash inflows hit $42.7 billion, a record for the first two months of any previous years. [February ETF Performance Report]
With investors showing more risk appetite, global equities-related ETFs garnered the largest portion of new inflows at $5.6 billion. In comparison, long U.S. equity ETFs only grew by $6 million. According to IndexUniverse data, Vanguard MSCI Emerging Markets (NYSEArca: VWO) and iShares MSCI Emerging Markets (NYSEArca: EEM) attracted the most assets last month, tacking on $2.5 billion and $1.4 billion, respectively.
Additionally, fixed-income ETFs brought in $4.2 billion in new assets. While most U.S. Treasury investments still offer paltry yields, investors have turned to corporate debt, like the SPDR Barclays Capital High Yield Bond Fund (NYSEArca: JNK), which added $1.1 billion, iShares iBoxx $ High Yield Corporate Bond Fund (NYSEArca: HYG), which grew by $813 million, and iShares iBoxx $ Investment Grade corporate Bond Fund (NYSEArca: LQD), which expanded by $809 million.
Commodity ETFs also added $2.9 billion. The gold ETF, SPDR Gold Shares ETF (NYSEArca: GLD), brought in $1.3 billion as gold prices inched toward $1,800 an ounce last month.
As of the end of February 2012, total U.S-listed ETPs expanded to 1,440 offerings, compared to the 1135 listed products in February 2011.
For more information on the performance of ETFs, 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.