Investors allocated plenty of capital to exchange traded funds in August as the asset class continued a torrid year-to-date pace of asset gathering that has seen previous annual inflows record already fall. Actually, investors added more than $31 billion to ETFs last month.
However, the bulk of those flows went to just a small number of plain vanilla ETFs.
“More than $31 billion flowed into exchange-traded funds over the month, according to FactSet data, bringing total global assets to almost $4.2 trillion. However, while there are nearly 1,800 U.S.-listed ETFs currently trading, nearly all the action is concentrated within a vanishingly small part of the ETF marketplace. To be exact, 51.3% of August’s inflows went to just 10 funds,” reports Ryan Vlastelica for MarketWatch.
S&P 500-tracking ETFs, such as the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV), and the Vanguard 500 Index (NYSEArca: VOO), were prolific asset gatherers last month.
“Due to its size and liquidity, many investors use the SPY, as it is known for its ticker symbol, as a way to hedge their portfolios or make short-term bets. As a result, flows into the fund can be quite volatile; even with the August inflows, the SPY has seen outflows of $3.47 billion thus far this year,” according to MarketWatch.