Emerging Markets Drive Another Month of ETF Inflows
Helped in large part by international funds, exchange traded funds hauled in $28.6 billion in new assets in January and helped make the December/January stretch the strongest two-month run of asset-gathering on record for the exchange-traded products industry, according to fund research firm Morningstar (NASDAQ: MORN).
"Flows were driven by international-stock ETFs, where diversified emerging-markets funds have been particularly strong, averaging a record $6 billion over the past two months," according to a note by Morningstar ETF analyst Michael Rawson.
In January, the iShares MSCI Emerging Markets Index Fund (NYSE: EEM) lead all ETFs in terms of inflows with $3 billion. After losing the crown of largest emerging markets ETF to the Vanguard FTSE Emerging Markets ETF (NYSE: VWO) in 2011, EEM has gotten back to within $10 billion of VWO, according to Morningstar.
The WisdomTree Japan Hedged Equity Fund (NYSE: DXJ) also impressed in terms of inflows last month, hauling in $1.2 billion in new investments. DXJ's recent asset growth, helped by the tumbling yen, has been nothing short of stunning. The fund had just over $500 million in AUM in early December, but entered trading today with $2.82 billion in assets.
"At the firm level, iShares led all ETF firms with $12.7 billion of inflows, while Vanguard took in $10.3 billion," according to Rawson.
State Street's (NYSE: STT) State Street Global Advisors, the second-largest U.S. ETF sponsor, saw $3.4 billion in outflows last month due primarily to a combined $7 billion in departure from the SPDR S&P 500 (NYSE: SPY) and the SPDR Gold Shares (NYSE: GLD).
"Vanguard's ETF flows tend to be very stable. Over the past five years, Vanguard ETF flows have been positive each and every month, while iShares has had 14 months in which flows were negative," Rawson noted.
Invesco's PowerShares (NYSE: IVZ) saw inflows north of $1.8 billion last month while WisdomTree (NASDAQ: WETF) captured more than $2.2. billion in new investor capital. New York-based WisdomTree, the only publicly traded pure play ETF issuer, finished January just $1 billion behind ProShares in the battle for the sixth spot among U.S. ETF sponsors.
Overall, net flows to international stock ETFs were $15.1 billion last month while investors poured over $8.2 billion into sector fund and over $4.3 billion into diversified U.S. equity ETFs. Commodities ETFs saw net outflows of $682 million, according to Morningstar data.
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