March ETF Fund Flows: BlackRock, SSgA Back On Top

April 03, 2010

The $20 billion in new money that flowed into exchage-traded funds in March showed that the ETF market is again red-hot, and suggested investors are starting to believe the economy is turning a corner.

In March, investors poured more than $20 billion in net new cash into exchange-traded funds, signaling rising conviction in economic recovery and allowing State Street Global Advisors and BlackRock iShares to recover from a weak start to the year, according to data compiled by IndexUniverse.com.

State Street Global Advisors led all providers with $8.26 billion in new investment, followed by BlackRock with $5.35 billion. Vanguard came in third with $2.60 billion.

Despite the strong March, SSgA’s total assets remained essentially flat year-over-year. As of March 31, SSgA's assets under management totaled $197 billion, approximately $200 million under its assets for this time last year.

The true recovery story was to be found in BlackRock, sponsor of the iShares family of ETFs and the world's largest ETF provider. The firm seemed to recover handily from its losses in January and February, where it had seen $1.9 billion and $1.2 billion in outflows, respectively.

In terms of assets under management, BlackRock remains by far the largest ETF provider in the U.S., with $385 billion. SSgA comes in second with $197 billion in assets, while Vanguard takes down third place at $104 billion. PowerShares ($49 billion), ProShares ($25 billion) and Van Eck ($14 billion) round out the providers with more than $10 billion in assets under management.

Industrywide assets are up $32 billion so far this year, to $820 billion.

 

2010 League Table ($, Millions)

Issuer Mar. Flows Feb. Flows Jan. Flows AUM at
3/31/2010
AUM at 12/31/2009 Q1 2010
AUM Growth
BlackRock 5,349 (1,160) (1,923) 385,455 372,784 12,671
SSgA

8,256

2,884

(18,871)

197,210

197,486

(276)

Vanguard

2,604

2,150

3,674

103,682

91,347

12,336

Invesco PowerShares

1,720

638

(1,814)

48,528

46,978

1,550

ProShares

(166)

925

16

24,518

24,298

221

Van Eck

685

(159)

738

13,813

12,547

1,266

WisdomTree

217

286

(192)

6,767

6,329

438

Barclays Capital

677

(19)

604

6,627

5,977

650

Rydex

445

52

59

6,475

5,726

749

Direxion

(127)

298

(55)

5,062

5,018

44

US Commodity Funds

(221)

(795)

(329)

4,845

7,406

(2,561)

Merrill Lynch

(176)

(109)

(205)

4,824

3,061

1,763

Claymore

132

(89)

55

3,042

2,925

117

First Trust

458

42

186

2,639

1,852

787

ETF Securities

150

38

545

1,288

492

795

ELEMENTS

17

3

35

990

1,015

(25)

JPMorgan Chase

-

220

-

990

716

274

Charles Schwab

241

136

194

954

345

608

PIMCO

213

109

80

877

475

402

RevenueShares

36

16

25

421

314

107

GreenHaven

4

(12)

30

239

229

10

UBS

10

1

35

218

161

57

Fidelity

17

-

-

161

134

27

Xshares

(5)

(4)

(9)

156

169

(14)

GlobalX

27

15

10

143

88

55

IndexIQ

18

1

19

141

103

38

Jefferies

-

4

11

94

79

15

Emerging Global Shares

17

9

18

93

48

45

Old Mutual

(8)

22

-

79

62

18

Goldman Sachs

-

-

-

64

64

(0)

ALPS

10

6

3

47

27

20

Grail Advisors

1

-

11

32

18

14

Advisorshares

-

-

5

28

23

5

FaithShares

-

-

-

14

13

1

Credit Suisse

5

5

-

10

-

10

Geary Advisors

-

-

-

3

3

0

Javelin

-

(12)

(0)

2

15

(12)

 

 

 

 

 

 

 

Industry:

20,604

5,501

(17,045)

820,530

788,327

32,203


Belief In The Recovery

An increasing conviction in the strength of the recovery seems indicated by investors' return to large-cap ETFs. Investors poured $1.68 billion in new investment in March into the PowerShares QQQ (NYSEArca: QQQQ), catapulting the fund back into the big leagues. And of course, the most popular ETF in March remained the SPDR S&P 500 ETF (NYSEArca: SPY), which gathered $3.72 billion in new investment.

But investors did not pile into large-caps across the board. Interestingly, the iShares S&P 500 Fund (NYSE Arca: IVV), which is smaller but nearly identical to SPY, saw $294 million in outflows last month. In addition, the Dow Diamonds, which tracks 30 companies in the Dow Jones Industrial Average (NYSEArca: DIA), saw March outflows of $314 million.

With market observers predicting an inevitable hike in interest rates, investors shifted their bond ETF allocations to favor shorter durations. The iShares Barclays Short Treasury Bond ETF (NYSEArca: SHV), which is so short in duration as to be nearly a money market fund, gathered $1.66 billion in new investments, while higher yield bond vehicles also attracted investors looking for yield. This includes the iBoxx$ High Yield Corporate Bond (NYSEArca: HYG) and the SPDR Barclays Capital High Yield Bond (NYSEArca: JNK), which saw inflows of $539 million and $479 million, respectively.

On the other hand, the increase in iShares super-short-term ETF seems to have come at the expense of slightly longer-duration vehicles, such as the iShares Barclays 1-3 Year Treasury Bond (NYSEArca: SHY), which saw $318 million in net outflows.

 

March's Big ETF Winners
($, Millions, Net)

Ticker

Name

Mar. Flows

Feb. Flows

Jan. Flows

AUM at

3/31/2010

SPY

SPDR S&P 500

3,718

1,522

(16,018)

77,824

QQQQ

PowerShares QQQ

1,678

872

(1,206)

20,917

SHV

iShares Barclays Short Treasury Bond

1,663

121

55

3,591

GLD

SPDR Gold

828

(161)

(776)

40,504

VWO

Vanguard Emerging Markets

774

1,149

982

22,920

HYG

iBoxx$ High Yield Corporate Bond

539

(103)

237

5,239

FAZ

Direxion Daily Financial Bear 3x

499

90

(69)

1,232

JNK

SPDR Barclays Capital High Yield Bond

479

153

182

4,307

IJH

iShares S&P 400 MidCap

451

(40)

85

7,602

IJK

iShares S&P MidCap 400 Growth

427

62

(71)

2,607

While midcap funds like the iShares S&P 400 Midcap ETF (NYSEArca: IJH) and the iShares S&P MidCap 400 Growth ETF (NYSEArca: IJK) continued to attract new investment, small-cap vehicles suffered. Both the iShares Russell 2000 Index Fund (NYSEArca: IWM) and Vanguard Small-Cap ETF (NYSEArca: VB) lost money, experiencing $991 million and $519 million in March outflows, respectively.


Interestingly, BlackRock continued to lose market share to Vanguard in the emerging markets sector, as its iShares MSCI Emerging Markets ETF (NYSEArca: EEM) saw $696 million in March outflows compared with $774 million in net inflows for the Vanguard Emerging Markets ETF (NYSEArca: VWO). As of March, EEM remains larger than VWO, at $35 billion vs. $23 billion in assets under management, but the flow continues a trend in place for over a year of investors increasingly gravitating toward the lower-cost VWO.

 

March’s Big ETF Losers
($, Millions, Net)

Ticker

Name

Mar. Flows

Feb. Flows

Jan. Flows

AUM at
3/31/2010

IWM

iShares Russell 2000

(991)

845

(696)

13,244

EEM

iShares MSCI Emerging Markets

(696)

(2,444)

(1,224)

35,099

FAS

Direxion Daily Financial Bull 3x

(563)

(90)

(59)

889

VB

Vanguard Small-Cap

(519)

(73)

65

3,216

UUP

PowerShares DB US Dollar Index Bullish

(409)

(176)

(1,031)

1,674

SHY

iShares Barclays 1-3 Year Treasury Bond

(318)

594

26

8,002

DIA

Dow Diamonds

(314)

70

(705)

8,435

IVV

iShares S&P 500

(294)

359

(203)

22,782

UYG

ProShares Ultra Financials

(252)

(29)

(155)

1,844

FXI

iShares FTSE/Xinhua China 25

(205)

(469)

(1,270)

7,946

That said, iShares still dominates in traditional developed market exposure, with its flagship iShares MSCI EAFE ETF (NYSEArca: EFA) standing at $35.7 billion in assets.

The SPDR Gold Trust also remains a heavyweight in 2010, with $40.5 billion in assets, although year-to-date inflows have remained relatively anemic, at $281 million.

 

Q1 Ten Largest ETFs
($, Millions)

Ticker

Name

AUM at
3/31/2010

Q1 2010
Asset Growth

March
Flows

SPY

SPDR S&P 500

77,824

(7,084)

3,718

GLD

SPDR Gold

40,504

281

828

EFA

iShares MSCI EAFE

35,735

528

266

EEM

iShares MSCI Emerging Markets

35,099

(4,335)

(696)

VWO

Vanguard Emerging Markets

22,920

3,470

774

IVV

iShares S&P 500

22,782

958

(294)

QQQQ

PowerShares QQQ

20,917

2,357

1,678

TIP

iShares Barclays TIPS Bond

20,128

1,638

11

VTI

Vanguard Total Stock Market

14,425

983

241

IWM

iShares Russell 2000

13,244

272

(991)

SPY, IWM and QQQQ also had the highest turnover in March, with SPY far and away leading the pack with more than $451 billion changing hands. IWM came in second with over $90 billion, and QQQQ placed third with $77 billion.


March ETF Liquidity Mavens
($, Millions)

Ticker

Name

Mar. Turnover

Mar. Flows

AUM at

3/31/2010

SPY

SPDR S&P 500

451,067

3,718

77,824

IWM

iShares Russell 2000

90,265

(991)

13,244

QQQQ

PowerShares QQQ

77,005

1,678

20,917

EEM

iShares MSCI Emerging Markets

58,802

(696)

35,099

FAS

Direxion Daily Financial Bull 3x

55,739

(563)

889

GLD

SPDR Gold

35,623

828

40,504

EWZ

iShares MSCI Brazil

27,907

(43)

11,018

XLF

Financial Select Sector SPDR

27,771

238

6,831

XLE

Energy Select Sector SPDR

23,245

218

5,970

FXI

iShares FTSE/Xinhua China 25

22,461

(205)

7,946

Worth noting is that the daily liquidity throughout the month varied wildly, with leveraged and inverse funds often taking spots in the top 10 on any given day. However, the very nature of these high-velocity trading vehicles meant that investors moved between funds frequently, keeping all but the Direxion Financial Bull fund off the "most traded" list.

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