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The Markets April 13, 2011
ETF Flows Pick up Pace in March
Although the pace of flows into U.S. exchange-traded funds (ETFs) has decelerated in the past several months, March saw the pace pick back up, Morningstar Direct reports.
Reported by Rebecca Moore
According to the Morningstar Direct Fund Flows Update, ETF inflows rose to $7.4 billion from $6.6 billion a month prior.U.S. stock ETFs saw an aggregate $3.3 billion outflow in March. The lion’s share of those outflows came from the large-blend and growth categories of the style box, which saw $6.2 billion and $963 million in outflows, respectively.
Last month’s U.S. stock exodus was led by SPDR S&P 500 SPY, which claimed a $5.7 billion dollar outflow. Morningstar said many of the big names in broad index exposure followed suit, with iShares S&P 500 Index IVV, PowerShares QQQ QQQ, and SPDR Dow Jones Industrial Average ETF DIA bleeding $1.2 billion, $751, and $628 million, respectively.
Flows for U.S. stock were not, however, all outgoing. Morningstar data shows lateral movement within the asset class, as investors shifted into more narrowly targeted exposure. By category, equity energy, natural resources, consumer discretionary, and consumer staples attracted the largest flows. They accounted for $654 million, $579 million, $362 million, and $349 million, respectively.
International Stock carried the day, realizing a net $6.7 billion inflow after facing $508 million and $3.3 billion outflows in January and February, respectively. At $2.8 billion, iShares MSCI Japan Index EWJ saw the largest quarterly inflow of any U.S. ETF. Vanguard MSCI Emerging Markets ETF VWO claimed the largest monthly ETF inflow in March--$1.83 billion in total.
Over the last seven months, flows into the taxable-bond space have been meager at best. That said, last month saw the space make a healthy contribution to aggregate ETF inflows, collecting roughly $3.1 billion in total. The largest inflow within the space was claimed by iShares Barclays 1-3 Year Credit Bond CSJ, which saw a $334 million inflow, and followed closely by iShares iBoxx $ High Yield Corporate Bond HYG.
Given recent performance, the commodities ETF space realized a mild outflow, around $218 million. However, according to Morningstar, there were several noteworthy points here. United States Natural Gas UNG bled just under $2.6 billion last month. Spot NG was down roughly 5.5% on quarter.