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ETFGI's recent analysis found that $13.5 billion of net new assets (NNA) flowed into global Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) in October which is lower than the $40 billion of net inflows in September 2012. Investors and investments suffered from growing uncertainty in October over the likely outcome of the US presidential election, the impact of the fiscal cliff in the US, the likely impact of superstorm Sandy and the on-going debt concerns in the Eurozone.

US listed ETFs and ETPs which traditionally account for the majority of NNA saw these uncertainties dampen the inflows into ETFs and ETPs listed in the US to just $2.7 billion or 20% of NNA in October. Globally, ETFs and ETPs providing exposure to North America equities also suffered from these concerns as investors withdrew net outflows of $10.1 billion.

As the majority of concerns and uncertainties focused on the US, and investments in the US, it did not negatively impact NNA flows in all regions around the world. We saw robust flows into ETFs and ETPs listed in both Europe, which accounted for $4.6 billion or 34% of total NNA, and in Asia Pacific (ex Japan) which amassed $4.5 billion or 33.7% of the total. Products listed in Japan, Canada, Middle East and Africa and Latin America accounting for US$1.7 billion.

The source and composition of the fund flows in October shows that ETFs and ETPs are a product set that are increasingly being embraced by investors around the world and are a very good indicator of how investors are tactically and strategically adjusting their allocations to political, economic and other uncertainties that are impacting the markets.

At the end of October 2012, the global ETF and ETP industry had 4,694 ETFs and ETPs, with 9,646 listings, assets of $1.85 trillion, from 203 providers on 56 exchanges. Year-to-date global ETFs and ETPs have gathered $201.7 billion of net new assets.

Year-to-date through the end of October, equity ETFs and ETPs have gathered the largest net inflows accounting for US$114 billion, followed by fixed income ETFs and ETPs with US$57 billion and commodity ETFs and ETPs capturing US$20 billion.

Equity focused ETFs and ETPs gathered $3.2 billion in October and $114 billion YTD, which is $23 billion more than the NNA flows they received in all of 2011. In October investors withdrew $10.1 billion from ETFs and ETPs providing exposure to North American equity indices and invested $8.8 billion into ETFs and ETPs providing exposure to emerging market equity indices.

Fixed Income ETFs and ETPs received net inflows of $6.1 billion in October and $57 billion year to date, which is $21 billion more than the total net new assets they received in the same period last year. Within fixed income, corporate bond products have gathered the largest net inflows in October with $3.4 billion, followed by emerging market products with $1.9 billion.

Commodity products received NNA inflows of $3.3 billion in October and $20 billion year to date which is $5 billion more than full year 2011 NNAs. Precious metals gathered $2.4 billion in October and $17.6 billion year to date, followed by broad commodity exposure with $2.5 billion and $1.1 billion in energy exposure.

Below are charts which show the top 20 ETFs and ETPs listed in the United States which had the largest net new asset inflows and outflows during the month of October 2012

Top 20 US listed ETFs and ETPs by October net inflows

Ticker

Name

Assets
$ Mn
Oct-12

ADV
$ Mn Oct-12

Oct-12 NNA
$ Mn

IVV

iShares S&P 500 Index Fund

33,193

496

2,051

EEM

iShares MSCI Emerging Markets Index Fund

38,248

1,963

1,260

FXI

iShares FTSE China 25 Index Fund

5,985

574

997

GLD

SPDR Gold Trust

73,828

1,400

922

LQD

iShares iBoxx $ Investment Grade Corporate Bond Fund

25,477

303

818

SSO

ProShares Ultra S&P500

1,647

419

624

EWZ

iShares MSCI Brazil Index Fund

9,035

709

582

VCSH

Vanguard Short-Term Corporate Bond ETF

4,494

44

570

PCY

PowerShares Emerging Markets Sovereign Debt

2,806

47

498

IAU

iShares Gold Trust

11,579

116

480

EWH

iShares MSCI Hong Kong Index Fund

2,613

109

471

PFF

iShares S&P US Preferred Stock Index Fund

10,737

61

460

EMB

iShares JPMorgan USD Emerging Markets Bond Fund

6,185

92

437

XLV

Health Care Select Sector SPDR Fund

5,408

240

413

MBB

iShares Barclays MBS Bond Fund

6,412

65

402

EZU

iShares MSCI EMU Index Fund

1,622

61

390

BOND

PIMCO Total Return Exchange-Traded Fund

3,280

52

371

SCPB

SPDR Barclays Capital Short Term Corporate Bond ETF

1,623

20

347

VNQ

Vanguard REIT ETF

14,638

154

333

EWG

iShares MSCI Germany Index Fund

3,640

140

317

Top 20 US listed ETFs and ETPs by October net outflows

Ticker

Name

Assets
$ Mn
Oct-12

ADV
$ Mn Oct-12

Oct-12 NNA
$ Mn

SPY

SPDR S&P 500

109,025

19,588

(7,198)

QQQ

PowerShares QQQ Trust

30,672

2,915

(2,309)

IWM

iShares Russell 2000 Index Fund

16,671

3,049

(1,307)

DIA

SPDR Dow Jones Industrial Average ETF

10,322

749

(1,129)

IJH

iShares S&P MidCap 400 Index Fund

11,254

132

(925)

MDY

SPDR S&P MidCap 400 ETF Trust

9,257

407

(773)

OEF

iShares S&P 100 Index Fund

4,114

103

(770)

XLK

Technology Select Sector SPDR Fund

9,385

309

(658)

MVV

ProShares Ultra MidCap400

72

40

(527)

TIP

iShares Barclays TIPS Bond Fund

22,823

120

(463)

JNK

SPDR Barclays Capital High Yield Bond ETF

12,023

195

(461)

XLE

Energy Select Sector SPDR Fund

7,232

867

(400)

HYG

iShares iBoxx $ High Yield Corporate Bond Fund

16,931

316

(369)

TLT

iShares Barclays 20+ Year Treasury Bond Fund

3,068

711

(269)

XLI

Industrial Select Sector SPDR Fund

2,949

433

(269)

GOVT

iShares Barclays US Treasury Bond Fund

232

16

(264)

LTPZ

PIMCO 15+ Year US TIPS Index Fund

146

16

(255)

PHB

PowerShares Fundamental High Yield Corporate Bond

839

24

(252)

IBB

iShares Nasdaq Biotechnology Index Fund

1,998

100

(242)

TZA

Direxion Daily Small Cap Bear 3x Shares

836

298

(224)

Disclaimer: This commentary is published by, and remains the copyright of, ETFGI LLP ("ETFGI"). This commentary may only be used by the permitted recipients and shall not be provided to any third parties. ETFGI makes no warranties or representations regarding the accuracy or completeness of the information contained in this commentary.

ETFGI does not offer investment advice or make recommendations regarding investments and nothing in this commentary shall be deemed to constitute financial or investment advice in any way and shall not constitute a regulated activity for the purposes of the Financial Services and Markets Act 2000. Further, nothing in this commentary shall constitute or be deemed to constitute an invitation or inducement to any person to engage in investment activity. Should you undertake any such activity based on information contained in this commentary, you do so entirely at your own risk and ETF Global Insight shall have no liability whatsoever for any loss, damage, costs or expenses incurred or suffered by you as a result.

Source: Rising Uncertainty Sees Investors Withdraw $10B From ETFs With U.S. Equity Exposure In October