From the October 2011 issue of Research Magazine • Subscribe!

ETF Inflows to Hit $100 Billion

Despite a sluggish U.S. economy and the government’s debt crisis, the brisk pace of investment dollars flowing into ETFs continues.

During the first half of 2011, U.S.-listed ETFs gathered $56.3 billion in new assets, according to the Mid Year SPDR ETF Outlook report. That figure represents an impressive 52 percent gain from the same period in 2010, which recorded $37.3 billion in asset inflows.

“With demand for income and non-correlated assets on the rise, a growing universe of professional and retail investors are using ETFs to access precise sources of return and improve the diversification of their portfolios,” said Kevin Quigg, global head of the SPDR ETF Capital Markets Group at State Street Global Advisors. “If flows remain on their current pace, 2011 will mark the fifth consecutive year that ETFs attract more than $100 billion in positive cash flows.”

ETF money has flooded into gold (GLD) and silver (SLV) products, as investors attempt to hedge against uncertainty surrounding the government’s ongoing struggle with $14 trillion in national debt.

Precious metals (GLTR) have climbed more than 20 percent since the beginning of the year.

The ETF categories that gathered the most assets for the first six months of the year, were U.S. stock funds (+$20.47 billion), bond ETFs (+$18.23 billion) and global/international stock funds (+$13.10 billion). Top equity ETFs by assets are the SPDR S&P 500 ETF (SPY) and for U.S. bonds it’s the iShares Barclays U.S. Aggregate Bond ETF (AGG).

As of mid-year, the top three U.S. ETF providers by assets were BlackRock/iShares with $474.70 billion, State Street Global Advisors/SPDRs with $259.33 billion and the Vanguard Group with $174.75 billion.

Reprints Discuss this story
This is where the comments go.