The Markets February 12, 2010

ETFs Didn't Fare Well in January

Following strong inflows in 2009, U.S. exchange-traded-fund (ETF) flows dipped into the red to kick off 2010, with $16.7 billion in net outflows in January, according to estimates from Morningstar, Inc.
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Although industry assets fell to $746.9 billion, a 4.8% decline from December, total net assets for ETFs grew 49.2% on a year-over-year basis, Morningstar said in a press release.

SPDRs SPY had more than $15.1 billion in outflows in January. Morningstar noted that its massive size and heavy trading activity tends to skew ETF flow data.

International-stock ETFs took in $888.2 million in net assets in January, led by Vanguard Emerging Markets VWO, which saw $894 million in net inflows. Over the past year, Vanguard’s ETF assets have more than doubled, and the firm’s ETF market share has grown to about 12.4% from 8.5% a year ago, Morningstar said.

iShares Barclays TIPS Bond TIP had inflows of $674.1 million in January, as investors poured more than $1.9 billion into taxable-bond ETFs.

Morningstar’s report about January ETF activity is available at www.global.morningstar.com/janflows10.

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