Sept/Q3 ETF Flows: Risk Trade Is Back On

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Investors plowed more than $37 billion into U.S.-listed ETFs in September, the most since $29 billion of inflows in January of this year, as markets took to heart the Federal Reserve's latest move to stimulate the economy with a fresh round of bond buying, and took on risk, particularly in equities.

Overall, total U.S.-listed ETF assets rose 5.3 percent to $1.301 trillion from $1.235 trillion at the end of August, according to data compiled by IndexUniverse. At the end of September-and at the end of the third quarter-ETF assets were just shy of a record of nearly $1.311 trillion set on Wednesday, Sept. 19.


More than $30 billion of the September flows were in stock funds, with $22 billion of those targeting U.S. equities. In the third quarter, inflows totaled nearly $60 billion, just topping first-quarter inflows of $56 billion and nearly tripling second-quarter flows of $20.41 billion. Total assets at the end of last month were up 22.5 percent from the end of 2011, and up a third from $973.5 million a year ago.

The simple possibility of the Fed's third round of quantitative easing-QE3 in market-speak-was enough to bring investors back in droves in the third quarter and in September in particular. Similar easy-money moves by the European Central Bank and by the Bank of Japan aimed at supporting fragile growth in the global economy also encouraged investors to take risks.

Sept. 2012 Flows By Asset & Total Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 22,290.02 599,373.64 3.72%
International Equity 8,492.31 294,621.73 2.88%
U.S. Fixed Income 2,511.72 221,485.75 1.13%
International Fixed Income 1,063.86 21,051.47 5.05%
Commodities 2,987.62 123,156.86 2.43%
Currency 111.00 3,019.01 3.68%
Leveraged - 60.01 13,064.48 -0.46%
Inverse - 105.71 18,989.76 -0.56%
Asset Allocation 93.10 2,203.90 4.22%
Alternatives 213.32 4,079.18 5.23%
Total: 37,597.24 1,301,045.78 2.89%
Q3c2012Flows By Asset & Total Net Flows ($, mm) AUM ($, mm) % of AUM
U.S. Equity 30,740.86 599,373.64 5.13%
International Equity 13,611.98 294,621.73 4.62%
U.S. Fixed Income 6,618.08 221,485.75 2.99%
International Fixed Income 3,157.54 21,051.47 15.00%
Commodities 4,221.47 123,415.51 3.42%
Currency -3.06 3,019.01 -0.10%
Leveraged -1,463.82 13,064.48 -11.20%
Inverse 1,629.67 18,989.76 8.58%
Asset Allocation 239.75 2,212.82 10.83%
Alternatives 1,189.93 4,079.18 29.17%
Total: 59,942.40 1,301,313.34 4.61%

Popular Funds

Some of the market's biggest and most liquid equities funds were the beneficiaries of all the central bank policies, led by the SPDR S&P 500 ETF (NYSEArca:SPY), which gathered $10.5 billion in September and just over $9 billion in the entire third quarter.

Gold was also a beneficiary of QE3, as investors again fretted that with the dollar weakening, gold and other precious metals would become more reliable stores of value.

SPDR Gold Shares (NYSEArca:GLD), the $75 billion bullion fund, hauled in $1.8 billion in September and $2.41 billion in all of the third quarter.

Gold is quickly headed for $1,900 a troy ounce and, as we reported separately, silver-related ETFs were among the very-best-performing ETFs in the third quarter, rising by anywhere from around a quarter to a third in the June-September quarter.

Ticker Name Issuer September 2012 Flows September 2012 AUM ($, M) September 2012 Turnover
SPY SPDR S&P 500 SSgA 10,499.71 118,358.95 371,115.80
IWM iShares Russell 2000 BlackRock 2,799.65 18,363.40 71,186.47
GLD SPDR Gold SSgA 1,804.52 75,391.45 41,887.73
VWO Vanguard MSCI Emerging Markets Vanguard 1,687.87 57,351.49 18,447.45
IJH iShares S&P 400 MidCap BlackRock 1,283.12 12,273.44 3,016.36
EWZ iShares MSCI Brazil BlackRock 1,021.70 8,556.77 16,666.26
IYR iShares Dow Jones U.S. Real Estate BlackRock 991.40 4,851.99 10,810.55
HYG iShares iBoxx $ High Yield Corporate Bond BlackRock 990.27 17,233.78 6,553.00
XLF Financial Select SPDR SSgA 962.82 7,970.51 18,290.82
EEM iShares MSCI Emerging Markets BlackRock 962.37 37,245.42 39,147.52
Ticker Name Issuer Q3 2012 Flows Q3 2012 AUM ($, M) Q3 2012 Turnover
SPY SPDR S&P 500 SSgA 9,027.48 118,358.95 1,111,111.51
VWO Vanguard MSCI Emerging Markets Vanguard 4,024.36 57,351.49 53,415.38
IWM iShares Russell 2000 BlackRock 3,061.42 18,363.40 212,469.30
GLD SPDR Gold SSgA 2,408.77 75,391.45 96,906.32
HYG iShares iBoxx $ High Yield Corporate Bond BlackRock 2,141.03 17,233.78 18,240.05
IJH iShares S&P 400 MidCap BlackRock 1,616.13 12,273.44 5,945.42
JNK SPDR Barclays Capital High Yield Bond SSgA 1,425.68 12,452.98 11,340.63
XLF Financial Select SPDR SSgA 1,416.44 7,970.51 47,258.09
VNQ Vanguard REIT Vanguard 1,356.50 14,426.52 9,464.62
OEF iShares S&P 100 BlackRock 1,117.83 4,995.22 4,277.77

SSgA, iShares … And  FlexShares

State Street Global Advisors came out on top in the asset-gathering game in September, pulling in more than $16 billion last month. BlackRock's iShares, the biggest ETF company in the world, meanwhile gathered $18.3 billion in assets in the third quarter-more than any other ETF fund sponsor. For the first time in quite awhile, Vanguard didn't top the asset-gathering.

At the end of the third quarter, iShares had assets of almost $526 billion, SSgA had about $327 billion and Vanguard had just over $230 billion.

One relatively new ETF firm that had a solid third quarter was FlexShares, the unit of Chicago-based Northern Trust.

The company, which has a lineup of six funds, including three that canvass the global equities universe through the lens of small-cap/value tilts, gathered $652 million in the quarter and ended the period with more than $1.6 billion in assets. It launched its first four funds in September 2011.

September 2012 League Table
Issuer Net Flows AUM ($M) % of AUM Turnover
BlackRock 12,395.90 525,907.71 2.36% 300,381.70
SSgA 16,344.36 327,175.41 5.00% 533,030.29
Vanguard 5,027.43 230,332.89 2.18% 43,566.60
Invesco PowerShares 378.30 73,951.61 0.51% 57,918.35
Van Eck 1,245.86 28,115.34 4.43% 28,692.43
ProShares -69.10 22,354.99 -0.31% 55,956.75
WisdomTree 452.05 16,783.20 2.69% 3,322.81
Guggenheim 351.96 11,978.16 2.94% 7,687.39
First Trust 163.74 8,058.11 2.03% 1,470.43
PIMCO 519.74 7,802.90 6.66% 2,490.15
Charles Schwab 202.17 7,562.39 2.67% 1,119.33
Barclays Capital 70.18 6,828.30 1.03% 11,553.41
Direxion -42.93 6,210.87 -0.69% 37,050.57
JPMorgan - 5,233.77 0.00% 572.55
ALPS 182.72 4,376.88 4.17% 616.18
ETF Securities 40.46 4,353.29 0.93% 1,102.65
US Commodity Funds -249.76 3,026.99 -8.25% 10,804.91
Northern Trust 335.62 1,621.67 20.70% 328.68
Global X 103.47 1,444.76 7.16% 541.48
UBS 59.90 1,270.21 4.72% 357.94
Merrill Lynch 34.87 1,235.52 2.82% 189.64
Emerging Global Shares 13.16 773.48 1.70% 94.68
VelocityShares 45.93 693.02 6.63% 5,931.20
AdvisorShares 19.95 663.80 3.01% 331.02
IndexIQ 35.49 544.77 6.52% 151.19
GreenHaven 7.71 516.67 1.49% 47.61
Pacer Financial 1.37 438.26 0.31% 62.90
Credit Suisse 24.73 437.73 5.65% 100.51
RBS Securities 17.32 199.21 8.70% 81.88
Precidian - 193.02 0.00% 77.15
Russell -96.31 184.23 -52.28% 154.75
Fidelity - 184.13 0.00% 22.63
Deutsche Bank - 150.40 0.00% 9.41
Teucrium -27.41 82.11 -33.39% 174.13
Exchange Traded Concepts 8.51 79.90 10.65% 26.62
Jefferies -4.62 79.34 -5.83% 7.51
FFCM -4.68 51.52 -9.09% 30.24
Morgan Stanley - 31.87 0.00% 2.33
Columbia - 25.97 0.00% 3.44
Pax World 2.67 22.29 11.97% 3.78
Arrow Investment Advisors 3.90 17.44 22.34% 10.05
BNP Paribas - 17.18 0.00% 0.42
Factor Advisor - 15.72 0.00% 3.91
Huntington Strategy Shares 0.67 13.39 5.04% 0.94
CitiGroup 1.92 5.34 35.93% 6.21
Goldman Sachs - - - 34.52
Q3 2012League Table
Issuer Net Flows AUM ($M) % of AUM Turnover
BlackRock 18,323.61 525,907.71 3.48% 853,000.92
SSgA 17,540.57 327,175.41 5.36% 1,569,322.85
Vanguard 12,792.95 230,332.89 5.55% 121,793.61
Invesco PowerShares 3,036.92 73,951.61 4.11% 177,203.69
Van Eck 1,391.97 28,115.34 4.95% 72,325.87
ProShares 524.92 22,354.99 2.35% 170,857.45
WisdomTree 1,033.18 16,783.20 6.16% 9,103.13
Guggenheim 536.10 11,978.16 4.48% 17,906.85
First Trust 350.09 8,058.11 4.34% 4,638.65
PIMCO 1,500.56 7,802.90 19.23% 6,775.23
Charles Schwab 535.49 7,562.39 7.08% 3,562.42
Barclays Capital 723.05 6,828.30 10.59% 37,598.48
Direxion -257.45 6,210.87 -4.15% 117,990.02
JPMorgan - 5,233.77 0.00% 2,171.00
ALPS 701.75 4,376.88 16.03% 2,048.88
ETF Securities 130.14 4,353.29 2.99% 2,469.84
US Commodity Funds -391.20 3,026.99 -12.92% 33,800.99
Northern Trust 652.19 1,621.67 40.22% 816.93
Global X 95.20 1,444.76 6.59% 1,150.34
UBS 165.45 1,270.21 13.03% 945.33
Merrill Lynch 5.55 1,235.52 0.45% 585.25
Emerging Global Shares 39.30 773.48 5.08% 253.25
VelocityShares -14.34 693.02 -2.07% 15,068.71
AdvisorShares 98.54 663.80 14.84% 999.27
IndexIQ 47.48 544.77 8.71% 307.03
GreenHaven -31.76 516.67 -6.15% 166.87
Pacer Financial -26.62 438.26 -6.07% 143.91
Credit Suisse 49.17 437.73 11.23% 290.93
Goldman Sachs 260.52 267.57 97.37% 77.27
RBS Securities 28.12 199.21 14.11% 162.22
Precidian - 193.02 0.00% 267.40
Russell -138.47 184.23 -75.16% 416.09
Fidelity 181.96 184.13 98.83% 70.28
Deutsche Bank 4.34 150.40 2.88% 35.90
Teucrium -6.96 82.11 -8.47% 883.10
Exchange Traded Concepts 32.86 79.90 41.13% 72.23
Jefferies -4.62 79.34 -5.83% 20.37
FFCM 11.33 51.52 21.98% 59.92
Morgan Stanley - 31.87 0.00% 7.66
Columbia - 25.97 0.00% 11.04
Pax World 2.67 22.29 11.97% 11.27
Arrow Investment Advisors 7.66 17.44 43.89% 21.37
BNP Paribas - 17.18 0.00% 2.05
Factor Advisor - 15.72 0.00% 12.66
Huntington Strategy Shares 7.62 13.39 56.94% 9.77
CitiGroup 2.59 5.34 48.56% 14.76

Biggest Losers

A number of prominent bond funds littered our list of the least-popular ETFs in both September and the third quarter, as investors shed relatively safe fixed-income investments and took on more risk in the equities market.

In September, the iShares Barclays 3-7 Year Treasury Bond Fund (NYSEArca:IEI) shed $852.5 million in assets, ending the month with just over $2 billion in assets.

In the entire third quarter, the iShares Barclays 1-3 Year Treasury Bond Fund (NYSEArca:SHY) suffered outflows of $2.25 billion and ended the period with assets of almost $8.6 billion.

The U.S. ETF market's single-biggest fixed-income fund, the iShares Barclays TIPS Bond Fund (NYSEArca:TIP), recorded redemptions of $436 million in September and $349 million in the entire third quarter. It ended the period with just over $23 billion in assets.

Ticker Name Issuer September 2012 Flows September 2012 AUM ($, M) September 2012 Turnover
IEI iShares Barclays 3-7 Year Treasury Bond BlackRock -852.48 2,089.69 1,612.89
UST ProShares Ultra 7-10 Year Treasury ProShares -556.58 20.07 628.49
QQQ PowerShares QQQ Invesco PowerShares -528.75 34,766.36 47,279.86
EWJ iShares MSCI Japan BlackRock -522.76 4,214.42 2,760.97
SSO ProShares Ultra S&P 500 ProShares -496.98 1,088.72 7,451.95
TIP iShares Barclays TIPS Bond BlackRock -436.30 23,097.54 2,940.43
SHY iShares Barclays 1-3 Year Treasury Bond BlackRock -405.42 8,590.60 1,615.17
BIL SPDR Barclays Capital 1-3 Month T-Bill SSgA -251.98 1,058.32 653.67
XLI Industrial Select SPDR SSgA -203.45 3,230.92 8,716.48
UNG United States Natural Gas US Commodity Funds -195.30 1,154.96 4,055.12
Ticker Name Issuer Q3 2012 Flows Q3 2012 AUM ($, M) Q3 2012 Turnover
SHY iShares Barclays 1-3 Year Treasury Bond BlackRock - 2,245.79 8,590.60 7,001.74
IEI iShares Barclays 3-7 Year Treasury Bond BlackRock - 1,159.66 2,089.69 4,955.46
EWJ iShares MSCI Japan BlackRock -713.64 4,214.42 7,310.36
UST ProShares Ultra 7-10 Year Treasury ProShares -684.16 20.07 2,587.66
IEF iShares Barclays 7-10 Year Treasury Bond BlackRock -606.86 4,576.17 5,938.64
BIL SPDR Barclays Capital 1-3 Month T-Bill SSgA -503.97 1,058.32 1,984.25
XLU Utilities Select SPDR SSgA -430.00 6,158.91 15,310.65
FAS Direxion Daily Financial Bull 3x Direxion -411.58 1,114.87 25,417.05
SSO ProShares Ultra S&P 500 ProShares -361.22 1,088.72 22,888.44
TIP iShares Barclays TIPS Bond BlackRock -349.42 23,097.54 7,269.53

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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: GLD , IEI , SHY , SPY , TIP

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