By The ETF Professor
In what was the worst month for U.S. stocks since May 2012, global exchange traded products, ETFs and ETNs, shed $15 billion in assets last month after raking in $44 billion during July.
Funds with U.S. equity exposure lost $14.5 billion, but $13.8 billion of that figure was pulled from the SPDR S&P 500 (NYSEARCA:SPY), according to BlackRock data.
"Investors could also be positioning for increased market volatility in September. There are a number of upcoming events and announcements with implications for the global economy including the release of US Non-Farm Payroll numbers ahead of the highly anticipated next meeting of the FOMC, the German elections, meetings of other major Central Banks, US debt ceiling negotiations, and the escalating conflict in Syria," said BlackRock in its monthly "ETF Landscape" report.
BlackRock (NYSE:BLK) is the world's largest asset manager and parent company of iShares, the world's largest ETF sponsor. BlackRock noted that talk of Federal Reserve tapering prompted outflows of $3.5 billion last month from emerging markets while U.S. and Japan-focused funds continue to lead in terms of year-to-date inflows.
"Year-to-date (YTD) flows are now $128.1bn, behind the previous record high of $139.9bn through August 2012. However, the 2013 composition remains much different with Equity gathering 80% more than last year, Fixed Income just a third as much and Commodity outflows adding a significant drag," said BlackRock.
Despite some glimmers of hope among emerging markets ETFs, investors have pulled $11.1 billion from developing world equity funds this year.
Overall outflows from U.S.-listed ETFs were $17.5 billion last month, the largest number since early 2010, according to BlackRock data. Europe and Asia-Pacific equivalents combined for $3 billion of inflows.
With the departure of $13.8 billion from SPY, the WisdomTree Japan Hedged Equity Fund (NYSEARCA:DXJ) is now the top asset-gathering ETF this year with inflows of $8.44 billion. The iShares MSCI Japan ETF (NYSEARCA:EWJ) and the iShares Russell 2000 ETF (NYSEARCA:IWM) are in second and third with inflows of $4.65 billion and $4.45 billion, respectively. The Vanguard Total Stock Market ETF (NYSEARCA:VTI) has hauled in $4.27 billion in assets this year.
Among bond ETFs, the Vanguard Short-Term Bond ETF (NYSEARCA:BSV) and the PowerShares Senior Loan Portfolio (NYSEARCA:BKLN) have proven durable amid outflows from bond funds. BSV and BKLN have brought in almost $7.9 billion in assets this year. The Financial Select Sector SPDR (NYSEARCA:XLF) is this year's top asset-gathering sector ETF with $3.86 billion worth of inflows, according to BlackRock.
The worst offenders among outflows include the SPDR Gold Shares at almost $20.1 billion in lost assets this year. The iShares MSCI Emerging Markets ETF (NYSEARCA:EEM) and the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEARCA:LQD) have lost $14.3 billion combined through the end of August.
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Disclosure: Author is long DXJ, IAU and VWO.
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