Investors plowed $42 billion into ETFs last month, with the vast majority of that going into equities, for the third-biggest monthly asset-haul in the nearly 22-year history of ETFs. The inflows lifted 2014's year-to-date asset gathering above 2013's $188 billion record—a clear sign that investors are waking up at a quickening pace to the virtues of cheap, transparent and liquid ETFs.
Year-to-date asset gathering is now more than $192 billion, and total U.S.-listed ETF assets are just below the $2 trillion threshold. It took ETFs 18 years for ETF assets to reach $1 trillion, and another four years for ETF assets to double to $2 trillion. To put that figure into sharper focus, hedge funds now have about $3 trillion in assets, and open-end mutual funds have $15 trillion, according to data from each industry.
The early-autumn pullback in financial markets caused by concern that growth was flagging in the eurozone, in Japan and in China has given way to a focus on the relatively healthy U.S. economy. The S&P 500 Index rose in November by more than 2 percent, helping, with the powerful inflows, to lift total U.S.-listed ETF assets to $1.987 trillion, just shy of a record, according to data compiled by ETF.com.
The $42.16 billion asset-haul in November was the third-biggest month of inflows since the first ETF came to market in January 1993, according to data from TrimTabs. The financial research firm noted in a study published last year that the all-time record, according to the data it compiles, was $51.1 billion in September 2008, followed by $42.8 billion in December 2007.
|November 2014 Flows By Assets||Net Flows ($M)||AUM ($M)||% of AUM|
|U.S. Fixed Income||2,699.90||280,929.13||0.96%|
|International Fixed Income||463.75||24,623.24||1.88%|
SPY Leads The Charge
That first U.S. exchange-traded fund and the biggest ETF in the world, the SPDR S&P 500 ETF (SPY | A-98), was November's most popular fund, pulling in more than $10 billion in fresh assets. SPY now has assets of more than $200 billion, or 10 percent of all U.S.-listed ETF assets.
In total, U.S. equities pulled in almost $33 billion.
International equities meanwhile gathered almost $8 billion, with almost a third of those flows coming from two WisdomTree currency-hedged strategies focused on Japan and on Europe. The ETFs are tools that help U.S. investors take advantage of dollar strength versus the yen and euro.
Specifically, the WisdomTree Japan Hedged Equity Fund (DXJ | B-64) added $1.25 billion in new assets, making it a $12.6 billion ETF, while the WisdomTree Europe Hedged Equity Fund (HEDJ | B-54) pulled in $1.17 billion, making it a $4.64 billion fund by the end of last month.
Top Gainers November 2014
|Ticker||Name||Issuer||Flows||AUM ($, M)||Turnover|
|SPY||SPDR S&P 500||SSgA||10,060.36||200,166.73||334,117.65|
|QQQ||PowerShares QQQ||Invesco PowerShares||2,987.79||45,394.72||46,755.11|
|IJH||iShares Core S&P Mid-Cap||BlackRock||2,098.07||24,452.07||4,300.78|
|EWJ||iShares MSCI Japan||BlackRock||1,644.32||15,666.53||8,773.56|
|VOO||Vanguard S&P 500||Vanguard||1,639.43||26,543.12||5,343.72|
|IVV||iShares Core S&P 500||BlackRock||1,442.63||70,462.00||16,249.71|
|SHV||iShares Short Treasury Bond||BlackRock||1,345.17||5,567.12||3,115.40|
|DXJ||WisdomTree Japan Hedged Equity||WisdomTree||1,254.39||12,695.41||8,144.22|
|HEDJ||WisdomTree Europe Hedged Equity||WisdomTree||1,166.50||4,636.29||1,977.17|
|FTSM||First Trust Enhanced Short Maturity||First Trust||1,029.72||1,597.45||1,242.40|
And The Least Popular ETFs Are …
Last month's least-popular exchange-traded fund was the iShares 1-3 Year Treasury Bond ETF (SHY | A-97), which shed $3.5 billion in assets, or more than a quarter of its assets. Fixed-income flows have been volatile this year as investors grapple with contradictory signs of relative strength in the U.S. accompanied by weakness in other large parts of the global economy. A stronger economy is consistent with riskier equities being favored over safer bonds.
Gold, the ultimate safe-haven play, struggled as well. The SPDR Gold Shares (GLD | A-100), the world's biggest gold bullion ETF, suffered outflows of $870 million. Also, spot bullion prices dropped 0.5 percent last month, pulling assets in GLD down to $27.27 billion.
GLD was, for a short spell in August 2011, the biggest ETF in the world amid heightened anxiety following S&P's unprecedented downgrade of U.S. debt and signs the eurozone's economic challenges were deepening in the face of indecisive EU leadership.
But since then, strength in equity markets and a dearth of inflationary pressure have hurt gold prices and the popularity of ETFs like GLD. Gold prices peaked at $1,921 a troy ounce in August 2001 around the same time that GLD had almost $77 billion, which briefly made it the biggest ETF in the world. But gold prices have since dropped to $1,200 an ounce, and GLD, as noted, now has about $27 billion in assets.
Biggest Losers November 2014
|Ticker||Name||Issuer||Flows||AUM ($, M)||Turnover|
|SHY||iShares 1-3 Year Treasury Bond||BlackRock||-3,520.84||8,203.90||4,618.33|
|XLB||Materials Select SPDR||SSgA||-848.60||3,124.27||5,206.44|
|BIL||SPDR Barclays 1-3 Month T-Bill||SSgA||-571.78||1,294.42||1,599.52|
|IYH||iShares U.S. Healthcare||BlackRock||-555.53||1,829.38||1,143.59|
|XLU||Utilities Select SPDR||SSgA||-416.84||6,558.31||11,496.82|
|IYJ||iShares U.S. Industrials||BlackRock||-397.07||912.48||570.85|
|XIV||VelocityShares Daily Inverse VIX Short Term ETN||VelocityShares||-390.32||906.95||7,757.30|
|OIH||Market Vectors Oil Services||Van Eck||-362.44||848.91||8,818.37|
|UST||ProShares Ultra 7-10 Year Treasury||ProShares||-352.50||33.60||429.09|
November 2014 League Table
|Issuer||Net Flows||AUM ($M)||% of AUM||Turnover|
|US Commodity Funds||304.05||2,518.25||12.07%||12,971.28|
|Exchange Traded Concepts||303.45||2,117.43||14.33%||414.68|
|Emerging Global Shares||-2.79||1,807.52||-0.15%||147.72|
|Highland Capital Management||-0.00||317.03||0.00%||38.45|
|Arrow Investment Advisors||5.82||168.33||3.46%||44.60|
|Huntington Strategy Shares||-0.93||20.18||-4.61%||1.49|