World’s Biggest Gold ETF Drops To No. 3

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The SPDR Gold Trust (NYSEArca:GLD) is no longer riding shotgun to the SPDR S&P 500 (NYSEArca:SPY) when it comes to being the second-largest U.S.-listed ETF in terms of assets, a casualty of a 12-year rally in gold that grew weak-kneed in April.

GLD is still the world's-biggest bullion ETF, but has surrendered its longstanding position as the second-largest U.S. ETF after outflows last month of $6.67 billion and a sell-off took gold prices down 7.6 percent. The fund's total assets fell to $50.91 billion, bumping it to the third spot.

GLD has bled more than $13.55 billion in assets this year, the consequence of growing views that even as the Federal Reserve's five-year post-crash project to keep borrowing rates low and to weaken the dollar continues, the world's biggest economy is slowly climbing out of the doldrums, which has quelled the anxiety that has fueled gold's rally.

Right behind SPY's $132 billion footprint is the Vanguard FTSE Emerging Market ETF (NYSEArca:VWO). VWO, too, faced sizable outflows in April, bleeding more than $1.55 billion, but the fund's total assets of $57.7 billion now make it the second-largest U.S.-listed ETF after VWO climbed to the No. 3 spot a bit more than two years ago.

In addition to the de-linking of gold prices to the Fed's easy-money policies, the yellow metal's challenges are also linked to growing confidence in the equities markets. In April, investors poured some $8.40 billion into U.S. equities ETFs and another $1.16 billion into international equities.

'In April, investor confidence in gold was absolutely shattered, and I think the massive outflow from GLD is a reflection of that,' Sumit Roy, an analyst and managing editor at HardAssetsInvestor.com, said in a recent interview.

'The QE-gold link has been broken, which is leading to capitulation by a lot of bulls,' Roy added, referring to the way the Federal Reserve's 'quantitative easing' program of bond buying had fueled interest gold.

GLD, which launched in 2004, amassed its first $1 billion in assets in only three days, earning the distinction of being the most successful ETF launch ever in the industry's 20-year history.

It does remain the world's biggest bullion ETF-and by a wide margin-and it's no exaggeration to say that GLD was, and remains, one of the most important innovations ever in the world of investing.

April 2013 ETF Giants ($, Millions)

Ticker Name Issuer Flows AUM Turnover
SPY SPDR S&P 500 SSgA -86.85 132,152.43 455,677.27
VWO Vanguard FTSE Emerging Markets Vanguard -1,554.50 57,693.15 15,829.42
GLD SPDR Gold SSgA -6,774.72 50,915.38 63,818.17
EEM iShares MSCI Emerging Markets BlackRock -989.96 44,972.50 55,515.13
EFA iShares MSCI EAFE BlackRock -1,240.41 42,373.80 25,261.07
IVV iShares Core S&P 500 BlackRock -443.97 41,363.13 12,420.11
QQQ PowerShares QQQ Invesco PowerShares 277.00 32,912.25 57,571.93
VTI Vanguard Total Stock Market Vanguard 375.43 29,911.55 3,165.44
LQD iShares iBoxx $ Investment Grade Corporate Bond BlackRock -554.52 23,503.63 5,016.01
IWM iShares Russell 2000 BlackRock 67.96 21,322.89 96,887.97

March 2013 ETF Giants ($, Millions)

Ticker Name Issuer Flows AUM Turnover
SPY SPDR S&P 500 SSgA 670.49 129,835.33 360,998.47
GLD SPDR Gold SSgA -1,676.64 62,729.74 24,739.70
VWO Vanguard FTSE Emerging Markets Vanguard -1,040.05 58,489.10 14,675.90
EEM iShares MSCI Emerging Markets BlackRock -4,188.47 45,582.19 45,230.88
EFA iShares MSCI EAFE BlackRock -282.93 41,503.35 22,013.85
IVV iShares Core S&P 500 BlackRock 2,266.16 41,031.36 13,580.22
QQQ PowerShares QQQ Invesco PowerShares 120.09 31,868.73 38,176.26
VTI Vanguard Total Stock Market Vanguard 366.05 29,037.49 2,782.79
LQD iShares iBoxx $ Investment Grade Corporate Bond BlackRock -262.49 23,676.84 4,074.69
IWM iShares Russell 2000 BlackRock 1,335.14 21,399.91 60,345.36

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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 , SPY , VWO

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