The ETF industry had another solid month in October although
the market conditions weren't exactly favorable. More than a
dozen new products hit the market-while more than a few were
delisted-bringing the total number of ETFs close to the 1,440
mark with more than $1.28 trillion in total assets under
management.
Among the highlights of the new funds that launched included a
small group of ultra-cheap iShares funds-all of which have
expenses less than 0.20%. Additionally, investors saw a few more
tilt products hit the market, while a new yield king took center
stage,
MORL
, thanks to its impressive 24% yield (with leverage).
In terms of inflows, the broad industry saw more than $700
million (
in
aggregate according to XTF.com
) come into the market, led by strong showings in the rebranded
iShares Core S&P 500 ETF (
IVV
)
and the
iShares MSCI Emerging Markets Index Fund (
EEM
)
. These two had, respectively, $2.15 billion and $1.26 billion of
inflows, making them the only two to see more than one billion
dollars in inflows for the month.
Beyond those two, investors showed a renewed interest in
emerging markets such as with
FXI
and
EWZ
, while a host of bond and gold ETFs rounded out the top ten from
an assets look (see
Is WITE the Perfect Gold ETF Complement?
).
On the losing side, investors have apparently abandoned
SPY
in droves, according to XTF.com, as the product lost almost $9.5
billion in total assets or close to 10% of its total. Beyond that
popular fund, investors also headed for the exits in
QQQ
to the tune of half a billion dollars, while mid cap focused ETFs
were also unpopular, led by big asset losses in
IJH
and
MDY
.
Apparently, investors are temporarily tiring of
SPY
and
QQQ
, two of the most popular and well-known ETFs, along with
many-although clearly not all-of the large and mid cap focused
funds on the market. Instead, the focus continues to be, with the
exception of
EEM
, on safety as that is the only thing that can explain the
continued push to bonds and gold at this time (Read
Three Defensive ETFs for a Bear Market
).
In terms of performance, the
Global X FTSE Greece 20 ETF (
GREK
)
was the winner among unleveraged, non-inverse products, as it
added more than 23.6% in the month. This was followed by two
carbon/global warning focused ETNs-
GWO
and
GRN
-while Chinese and coal ETFs rounded out the rest of the top
ten.
On the downside, the
Market Vectors Solar Energy ETF (
KWT
)
was the biggest loser, slumping by 14.5% in the time period.
There wasn't much rhyme or reason to rest of the bottom of the
barrel, as a trio of ETNs rounded out the bottom four with
CVOL
,
JJN
, and
SSDD
occupying the spots.
If anything, it appears as though volatility products and
industrial metals were among the hardest hit during October,
along with the ever-weak solar industry (read
Is It Finally Time to Buy the Solar Industry?
).
Clearly, investors, despite the slump in the market, did see
some strength in a few overlooked sectors. Not only are these
segments often forgotten but they have been beaten down as well,
suggesting some market rotation as we enter the final part of the
year (read
The Truth about Low Volume ETFs
).
Lastly, it is also interesting to note how the industrial
metal segment was by far the weakest, with both broad products
and the various individual metal ETNs facing trouble in October.
Whether this trend continues, especially with Sandy damaging so
much in the Northeast, remains to be seen, suggesting that these
metals could again be in focus in November as well.
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ISHARS-EMG MKT (EEM): ETF Research Reports
GLBL-X/F GREC20 (GREK): ETF Research Reports
ISHARS-SP500 (IVV): ETF Research Reports
MKT VEC SOLAR (KWT): ETF Research Reports
NASDAQ-100 SHRS (QQQ): ETF Research Reports
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