US ETF Inflows Hit A Record $188B In 2012
Fixed Income Shined In 2012
As a percentage of assets under management, bond ETF assets grew quite sharply in 2012, and the launch of Bill Gross' Pimco Total Return ETF (NYSEArca: BOND) on March 1 kept the phenomenon in sharp focus throughout the year.
BOND, the second-most-successful ETF launch in history after the bullion fund SPDR Gold Shares (NYSEArca: GLD), ended 2012 as the 10th-most-popular fund. It gathered $3.77 billion and ended the year with $3.87 billion in assets, making it the most successful fund launch of 2012.
GLD, the world's second-biggest ETF—with assets of $72 billion—ended the year as the No. 5 fund, with inflows of $5.75 billion, as investors continued to grapple with uncertainty in the macroeconomy.
That uncertainty, plus the search for yield, fueled much of the popularity of bond funds, and the Top 10 list included fixed-income ETFs such as the iShares iBoxx $ Investment Grade Corporate Bond Fund (NYSEArca: LQD) and the iShares iBoxx $ High Yield Corporate Bond Fund (NYSEArca: HYG). LQD added $6.85 billion, while HYG pulled in $4.5 billion.
Overall, bond funds pulled in around $56 billion, or about 30 percent of the total asset haul.
More to the point, the nearly $44 billion that flowed into U.S. bond funds was almost 20 percent of the total, while the nearly $12 billion in new money invested in international bond funds constituted more than 45 percent of the total—both higher percentages than in either U.S. or international equities.
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