August 7, 2012

July ETF Inflows Top $16 Billion

The top 10 fund families collected nearly 90% of total ETF inflows

The ETF Industry Association says net inflows into exchange-traded funds in July 2012 were $16.3 billion, according to an S&P Capital IQ report released Tuesday—up from $12.1 billion in June. For the first seven months of this year, ETF net cash flows total $89 billion, the industry group says.

Data reported by Morningstar on Monday puts net long-term ETF inflows at $13.3 billion for July and $96.2 billion year to date. The Chicago-based research group also says that the top 10 fund families collected $11.8 billion, or 89% of total ETF inflows.

For the first seven months of 2012, the three top ETF providers had a combined market share of about 84%, according to ETFIA data—with BlackRock (iShares) at 41%, followed by State Street with 25% and Vanguard with 18%.

In addition, U.S. stock assets accounted for more than half of total inflows, says Morningstar, with $7.5 billion in new money—the bulk of which went to large-blend and large-value ETFs.

The main growth of ETF assets, from inflows and market results, “basically occurred in the first two months of 2012, when ETF assets were up $139 billion, or 13%, from where they were at year-end 2011,” wrote Tom Graves, S&P Capital IQ ETF analyst, in his latest report.

Overall, ETF assets rose $31 billion, or 2.6%, from the end of June, he adds. As of July 31, ETF assets totaled $1.191 trillion, among 1,268 products, including 33 funds of funds.

The Vanguard MSCI Emerging Markets Fund ETF (VWO), for instance, had the largest net cash flow—at $9 billion for the first seven months, says S&P Capital IQ.

Flows into taxable-bond ETFs came to a “screeching halt,” says Morningstar, as the group had inflows of just $1.2 billion, the smallest monthly intake for the asset class since February 2011.

Taxable high-yield bond funds, on the other hand, had inflows of $2.0 billion, while government bond funds shed $3.3 billion. And commodity-focused ETFs had their weakest showing year to date, losing nearly $1.6 billion, Morningstar says.

As for global ETFs, diversified emerging-markets products had inflows of close to $1.6 billion in July. Investors poured $700 million into Europe stock ETFs, the second-best month of inflows for this group since April 2011.

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