The Trend That Defined November's ETF Flows

U.S.-listed exchange traded funds continued to attract billions of dollars in November as low-cost passive strategies enticed investors in a volatile market.

Erik Oja, S&P Capital IQ equity analyst covering asset managers, argues that long-term trend away from active funds to passive funds was exacerbated during the recent volatility, with BlackRock benefiting the most from the trend as new assets flowed into the relatively cheap iShares ETFs, writes Todd Rosenbluth, S&P Capital IQ Director of ETF Research, in a research note.

U.S. ETFs garnered $26.3 billion in net inflows over November, with iShares ETFs attracting $13 billion and equity ETFs gaining greater attention.

For instance, among the most popular ETF trades in November, the iShares Russell 1000 ETF (NYSEArca: IWB) attracted $2.5 billion in net inflows and iShares Russell 2000 ETF (NYSEArca: IWM) saw $2.0 billion in inflows, according to ETF.com.

Additionally, for international exposure the iShares MSCI EAFE ETF (NYSEArca: EFA) saw $1.0 billion in inflows and iShares Core MSCI EAFE ETF (NYSEArca: IEFA) experienced $1.7 billion in inflows. Both ETFs track EAFE countries, but IEFA is cheaper and has greater small- and mid-cap exposure. The Vanguard FTSE Developed Markets ETF (NYSEArca: VEA), which also tracks developed markets outside the U.S., brought in $1.4 billion.

Among sector picks, the Technology Select Sector SPDR (NYSEArca: XLK) was the most popular, bringing in $798.3 million in November.