Nov. ETF Flows: GLD Glitters Amid Outflows

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Investors piled into precious metals and fixed-income last month, even as gnawing anxiety about Europe's indebtedness set the stage for first net outflows in the U.S. ETF industry since May. Between redemptions of $20 million and falling markets, ETF assets fell 1.5 percent to just under $1.065 trillion.

The SPDR Gold Shares (NYSEArca:GLD), the physical bullion ETF, hauled in $3.13 billion, making it last month's most popular ETF, according to data compiled by IndexUniverse. A host of bond funds were scattered all over IndexUniverse's "Top Gainers" table as well—a clear sign investors were looking for safe havens at a time of great uncertainty.

Indeed, if any investors ever doubted the political class's ability to do the right thing, last month might be held up as "Exhibit A" in Wall Street's court of opinion. The tangled and circuitous ways the eurozone has dealt with its debt crisis have altered the global outlook for the worse since it began festering almost two years ago. U.S. lawmakers, trying in vain to address the federal deficit, have hardly done better.

Only emergency action on the final day of the month by central banks around the world aimed at thawing global markets for short-term credit served as a meaningful counterpoint to the political meanderings of the previous 29 days.

Still, a 490-point jump of the Dow Jones industrial average on Nov. 30 notwithstanding, it might be prudent to view the central bankers' move as the dousing of a growing fire rather than a definitive repair of a global economy badly torched by a decade-long orgy of borrowing.

Amid such nagging pessimism, it's hardly a surprise that ETF outflows were concentrated in equities and other "risk" assets, such as junk bonds. Total flows out of equities totaled more than $8 billion, with much of those redemptions involving the biggest and most liquid U.S. equity ETFs, such as SPY and IWM.

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Flows By Asset Class And Total Flows
Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity -6,735.50 467,567.54 -1.44%
International Equity -1,650.92 253,760.18 -0.65%
U.S. Fixed Income 4,720.43 169,324.71 2.79%
International Fixed Income 302.94 12,178.46 2.49%
Commodities 2,890.09 117,229.12 2.47%
Currency 74.17 4,564.48 1.63%
Leveraged 1,192.93 13,968.42 8.54%
Inverse -888.23 21,962.55 -4.04%
Asset Allocation 9.47 928.11 1.02%
Alternatives 64.20 3,189.71 2.01%
Total: -20.42 1,064,673.27 0.00%

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Top Gainers 11/30/2011 ($, Millions)
Ticker Name Issuer November 2011 Flows November 2011 AUM ($, M) November 2011 Turnover
GLD SPDR Gold SSgA 3,130.02 72,869.46 50,152.46
VB Vanguard Small-Cap Vanguard 1,069.32 5,027.17 340.88
BND Vanguard Total Bond Market Vanguard 1,043.22 13,837.82 2,818.72
LQD iShares iBoxx $ Investment Grade Corporate Bond BlackRock 647.73 16,226.20 4,377.78
TIP iShares Barclays TIPS Bond BlackRock 608.47 22,020.39 2,242.39
VO Vanguard Mid-Cap Vanguard 529.62 3,856.54 250.62
VBK Vanguard Small-Cap Growth Vanguard 520.08 2,433.44 253.17
VBR Vanguard Small-Cap Value Vanguard 498.60 2,303.34 100.87
SDY SPDR S'P Dividend SSgA 492.69 7,840.52 1,645.29
SHY iShares Barclays 1-3 Year Treasury Bond BlackRock 473.18 10,032.87 3,137.85

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Running From Risk

The SPDR S'P 500 ETF (NYSEArca:SPY) suffered redemptions of $4.31 billion, making the world's biggest exchange-traded fund last month's least popular ETF. Investors meanwhile yanked $3.31 billion out of the iShares Russell 2000 Index Fund (NYSEArca:IWM).

Unsurprisingly, the redemptions extended to emerging markets equities and junk bonds—two pockets of the investment universe that are often lightning rods for risk appetite, or lack thereof.

For example, the SPDR Barclays Capital High Yield Bond ETF (NYSEArca:JNK) bled $335.8 million in assets last month, and the fund ended November with $7.75 billion in assets.

Also, the Vanguard MSCI Emerging Markets ETF (NYSEArca:VWO), the largest exchange-traded fund focused on the emerging markets, suffered redemptions of $611.1 million, and assets in the fund fell almost 4.5 percent to $44.1 billion.

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Biggest Losers ($, Millions)
Ticker Name Issuer November 2011 Flows November 2011 AUM ($, M) November 2011 Turnover
SPY SPDR S'P 500 SSgA -4,314.09 86,092.16 643,133.73
IWM iShares Russell 2000 BlackRock -3,306.78 13,490.27 106,238.80
IVV iShares S'P 500 BlackRock -1,512.41 25,814.65 11,836.28
XLF Financial Select SPDR SSgA -1,050.42 4,474.31 27,939.33
DIA SPDR Dow Jones Industrial Average Trust SSgA -782.09 10,520.60 23,275.21
XLI Industrial Select SPDR SSgA -778.66 2,687.39 12,714.25
XLE Energy Select SPDR SSgA -638.13 7,441.25 31,141.74
VWO Vanguard MSCI Emerging Markets Vanguard -611.75 44,095.91 17,794.61
QQQ PowerShares QQQ Invesco PowerShares -502.25 24,140.71 75,893.94
JNK SPDR Barclays Capital High Yield Bond SSgA -335.82 7,750.82 3,879.82

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BND And Other Bond Tales

Apart from GLD, bond funds loomed largely on our Top Gainers table, none more so than the Vanguard Total Bond Market ETF (NYSEArca:BND). BND pulled in $1.04 billion in fresh assets, and ended the month a $13.84 billion fund.

BND's creations were the leading edge of a broad push into fixed income, totaling $4.72 billion for U.S.-focused funds and another $302.9 million on international bond ETFs.

The fixed-income ETFs on our Top Gainers table and the assets they captured are:

  • iShares iBoxx $ Investment Grade Corporate Bond Fund (NYSEArca:LQD), $647.7 million
  • iShares Barclays TIPS Bond Fund (NYSEArca:TIP), $608.5 million
  • iShares Barclays 1-3 Year Treasury Bond Fund (NYSEArca:SHY), $473.2 million

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The presence of several Vanguard equity funds on the list of most popular ETFs has a pretty good explanation, and it isn't that a number of contrarians were trafficking heavily last month in ETFs sponsored by the company John Bogle founded.

While Vanguard doesn't comment on daily or monthly investment flows as a matter of policy, officials at the Valley Forge, Pa.-based firm have told IndexUniverse in the past that it does a lot of fund rebalancing toward the end of one month and the beginning of another.

Vanguard thus probably got an artificial pass on our League Tables, which showed it raking in more than $5 billion in new assets last month, while BlackRock's iShares and State Street Global Advisors had net outflows of $1.16 billion and $4.6 billion, respectively.

As it stands, iShares, SSgA and Vanguard remained the three biggest U.S. ETF firms at the end of last month—in that order, with assets of $444.71 billion, $264.55 billion and $173.37 billion, respectively.

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November 2011 League Tables
Issuer Net Flows AUM ($M) % of AUM Turnover
BlackRock -1,161.18 444,706.05 -0.26% 387,245.32
SSgA -4,599.33 264,549.39 -1.74% 876,549.91
Vanguard 5,210.45 173,370.31 3.01% 40,222.71
Invesco PowerShares -910.27 56,593.29 -1.61% 87,180.23
ProShares 48.24 24,405.16 0.20% 112,009.15
Van Eck 355.17 24,354.71 1.46% 22,971.63
WisdomTree 242.59 11,990.13 2.02% 3,423.45
Rydex -86.58 8,157.20 -1.06% 10,652.59
Direxion 168.96 7,442.52 2.27% 115,299.26
Barclays Capital -113.15 6,590.95 -1.72% 26,277.41
First Trust 16.63 6,292.85 0.26% 2,164.51
Merrill Lynch 42.09 5,363.29 0.78% 20,168.40
Charles Schwab 210.46 4,757.97 4.42% 1,481.73
ETF Securities -1.96 3,902.41 -0.05% 1,415.34
PIMCO 75.39 3,566.13 2.11% 808.87
JPMorgan Chase 41.52 3,247.20 1.28% 829.73
US Commodity Funds 1.55 3,203.71 0.05% 13,155.52
Guggenheim 51.27 3,109.06 1.65% 514.07
ALPS 154.33 1,825.90 8.45% 386.80
Global X -24.37 1,248.20 -1.95% 414.61
UBS 9.13 871.86 1.05% 215.88
VelocityShares 103.62 688.45 15.05% 6,796.47
GreenHaven 35.12 631.80 5.56% 129.09
Emerging Global Shares -4.65 491.79 -0.95% 87.89
RevenueShares -0.54 455.20 -0.12% 36.67
AdvisorShares 26.07 436.07 5.98% 185.91
IndexIQ 20.15 435.96 4.62% 81.76
FlexShares 14.30 409.54 3.49% 64.26
Credit Suisse -7.82 362.62 -2.16% 40.46
Russell 92.11 257.82 35.73% 265.84
Deutsche Bank -8.13 173.15 -4.69% 72.12
Precidian -6.65 150.51 -4.42% 33.54
RBS Securities - 119.15 0.00% 17.76
Jefferies -6.34 116.72 -5.43% 27.11
Teucrium -12.06 93.02 -12.97% 66.58
FocusShares 2.21 78.65 2.81% 26.03
Goldman Sachs - 76.16 0.00% 16.58
FFCM 1.24 45.06 2.75% 17.16
Morgan Stanley - 28.62 0.00% 1.07
FactorShares - 26.10 0.00% 74.23
Columbia - 24.20 0.00% 4.05
CitiGroup - 13.21 0.00% 20.96
Pax World - 7.59 0.00% 4.51
Fidelity - - - 26.67

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ETF Giants ($, Millions)
Ticker Name Issuer November 2011 Flows November 2011 AUM ($, M) November 2011 Turnover
SPY SPDR S'P 500 SSgA -4,314.09 86,092.16 643,133.73
GLD SPDR Gold SSgA 3,130.02 72,869.46 50,152.46
VWO Vanguard MSCI Emerging Markets Vanguard -611.75 44,095.91 17,794.61
EFA iShares MSCI EAFE BlackRock 11.94 36,306.16 27,175.18
EEM iShares MSCI Emerging Markets BlackRock -112.85 32,709.45 54,747.25
IVV iShares S'P 500 BlackRock -1,512.41 25,814.65 11,836.28
QQQ PowerShares QQQ Invesco PowerShares -502.25 24,140.71 75,893.94
TIP iShares Barclays TIPS Bond BlackRock 608.47 22,020.39 2,242.39
VTI Vanguard Total Stock Market Vanguard 18.17 19,028.57 2,539.43
LQD iShares iBoxx $ Investment Grade Corporate Bond BlackRock 647.73 16,226.20 4,377.78

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Don't forget to check IndexUniverse.com's ETF Data section.

Copyright ® 2011 IndexUniverse LLC . All Rights Reserved.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs

Referenced Stocks: IWM , JNK , LQD , SHY , TIP

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