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By Matthew Hougan

For the first time in recent memory, new money flooded into the ETF industry last week, as investors created a net $8.7 billion in new ETF shares. 143 ETFs saw net creation activity for the week ending March 14, while 125 had net redemption activity. The size of the creations far outweighed the size of the redemptions, leading to the sharp growth in new shares created.

Largest Net Creations

The Select Sector SPDR - Financial (NYSEARCA:XLF) led in new creation activity for the week, posting $2.85 billion in net creations. Indeed, financial ETFs did well on the creation front in general: Notice the iShares Dow Jones U.S. Broker-Dealers Index Fund (NYSEARCA:IYR), which saw $284 million in net creation activity, more doubling the size of the fund. SSgA's KBW Regional Banking ETF (NYSEARCA:KRE) also saw strong inflows. Of course, a lot of the activity in these ETFs represented short activity as investors positioned around the Bear Stearns news.

Interestingly, there was also strong creation activity in some "mainline" ETFs. The iShares Russell 2000 (NYSEARCA:IWM) posted $2.7 billion in net creation activity, while the S&P 500 SPDR (NYSEARCA:SPY) saw $2.3 billion. The DJIA Diamonds (NYSEARCA:DIA) did well too, with $742 million in net creations. Clearly, investors were using these ETFs (both long and short) to position money quickly during the volatile markets of last week.

Largest Net Creation Activity: Week Ending March 14, 2008

Fund Name

Ticker

Net Assets

Net Creation Activity

Select Sector SPDR-Financial

XLF

$7,776,786,316

$2,849,336,000

iShares Russell 2000

IWM

$11,656,539,000

$2,664,933,000

S&P 500 SPDR

SPY

$68,153,505,242

$2,315,898,000

DJIA DIAMONDS

DIA

$9,478,061,708

$742,065,000

Select Sector SPDR-Utilities

XLU

$2,190,965,154

$407,575,500

iShares DJ US Real Estate

IYR

$1,908,036,000

$284,310,000

iShares Dow Jones U.S. Broker-Dealers Index Fund

IAI

$392,462,000

$267,036,000

S&P 400 MidCap SPDR

MDY

$7,416,507,120

$254,106,000

SPDR S&P Retail ETF

XRT

$361,647,000

$188,551,000

Rydex Japanese Yen Trust

FXY

$1,260,475,000

$178,650,000

KBW Regional Banking

KRE

$533,219,508

$163,122,000

Vanguard Mid-Cap Growth

VOT

$548,703,761

$159,824,000

streetTRACKS Gold Trust

GLD

$21,048,125,000

$158,480,000

Oil Services HOLDRS

OIH

$2,458,161,510

$155,254,890

Vanguard Pacific ETF

VPL

$1,533,443,932

$153,623,870

iShares MSCI-Taiwan

EWT

$3,154,860,000

$149,940,000

Vanguard Small-Cap Growth

VBK

$829,594,424

$136,598,000

ProShares UltraShort S&P 500

SDS

$3,045,195,000

$128,115,000

PowerShares DB Commodity Index Tracking Fund

DBC

$2,514,232,000

$116,760,000

Vanguard Emerging Markets

VWO

$6,012,875,804

$104,639,312

Net Redemption Activity

On the redemption side, the iShares MSCI-Emerging Markets ETF (NYSEARCA:EEM) led all ETFs with $1.3 billion in net redemption activity. From there, it's hard to pick out a trend among the remaining funds.

One item of note is the United States Oil Fund (NYSEARCA:USO), which saw $175 million in net redemption activity last week, even as oil surged to a new record high. That fund, which once had over $1 billion in assets, now is down to just $411 million, as competing commodity futures funds have nudged their way into the picture.

Largest Net Redemption Activity: Week Ending March 14, 2008

Fund Name

Ticker

Net Assets

Net Redemption Activity

iShares MSCI-Emerging Markets

EEM

$23,399,127,000

($1,252,803,000)

Select Sector SPDR-Energy

XLE

$4,990,784,964

($403,436,000)

iShares Lehman 1-3 Year Treasury Bond Fund

SHY

$9,574,434,000

($311,022,000)

iShares MSCI-EAFE

EFA

$45,296,556,000

($298,284,000)

Select Sector SPDR-Materials

XLB

$1,248,915,444

($210,426,000)

iShares Russell 2000 Value

IWN

$3,232,052,000

($199,348,000)

United States Oil Fund LP

USO

$410,639,000

($174,740,000)

iShares Lehman 20+ Year Treasury Bond Fund

TLT

$1,565,291,000

($168,714,000)

iShares MSCI-Japan

EWJ

$7,486,830,000

($167,670,000)

Vanguard European ETF

VGK

$2,713,717,115

($156,792,281)

iShares FTSE/Xinhua China 25

FXI

$4,989,621,000

($140,458,500)

iShares MSCI-Malaysia

EWM

$1,124,913,000

($134,853,000)

iShares Russell 1000 Value

IWD

$8,360,790,000

($109,530,000)

iShares MSCI-Hong Kong

EWH

$2,063,739,000

($94,824,000)

iShares Russell 1000

IWB

$3,607,791,000

($79,134,000)

SPDR S&P Metals & Mining ETF

XME

$537,134,000

($73,580,000)

iShares Russell MidCap Value

IWS

$2,612,204,000

($70,774,000)

Biotech HOLDRS

BBH

$728,761,798

($66,527,595)

iShares MSCI-South Korea

EWY

$2,870,100,000

($63,780,000)

SPDR S&P Oil & Gas Exploration & Production

XOP

$246,420,000

($62,974,000)

ETF League Table: Week Ending March 14, 2008

State Street Global Advisors rode strong demand for its Select Sector SPDRs and SPY ETFs to post by far the largest net creation activity by fund family. SSgA also saw the largest boost in net assets, which jumped $8.3 billion. That compares with its chief rival BGI, which saw little net creation activity and actually lost more than $500 million in assets on the week.

After SSgA, Vanguard showed continued strong growth with nearly a billion dollars in net creation activity and more than $1.3 billion in total net new assets. The company now has more than $43 billion in net assets.

ProShares, Rydex and BGI rounded out the top five for net creation activity.

On the flip side, Victoria Bay Asset Management saw the largest net redemptions by far, at $160 million.

ETF Families Sorted By Net Creation Activity For The Week Ending March 14, 2008

Family

Net Creation

Net Assets

Net Asset Change

SSgA

$6,563,995,000

$142,398,471,114

$8,319,756,006

Vanguard

$926,757,352

$43,236,063,999

$1,320,065,770

ProShares

$763,646,250

$16,302,849,070

$292,965,840

Rydex

$356,262,450

$5,910,276,138

$431,245,178

BGI

$144,075,500

$301,012,441,800

($541,525,600)

PowerShares

$56,531,820

$36,350,857,900

$340,499,268

MacroShares

$32,080,000

$120,300,000

$32,102,000

HOLDRS

$18,964,822

$7,128,570,590

$18,389,119

WisdomTree

$17,781,000

$4,210,480,000

($5,263,000)

First Trust

$6,961,000

$883,617,181

$13,552,572

SPA ETFs

$1,981,000

$16,331,726

($1,859,486)

Ameristock

-

$13,324,752

$66,528

Fidelity

-

$78,156,000

$54,000

FocusShares

-

$22,885,602

$1,137,952

XShares

-

$243,697,074

($781,292)

Ziegler

-

$7,156,160

$109,440

RevenueShares

-

$14,553,164

$126,882

GreenHaven

($3,580,000)

$32,220,000

($3,250,000)

Claymore

($15,358,500)

$1,820,415,628

($24,050,940)

Van Eck

($46,586,500)

$5,427,725,075

($35,463,725)

Victoria Bay

($159,779,000)

$1,026,486,000

($107,482,000)

Source: ETF Fund Flows (Week Ending 3/14/08)