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.