Investing September 14, 2010

ETF Inflows Halt in August

September 14, 2010 (PLANSPONSOR.com) - Exchange-traded funds posted net outflows totaling roughly $1.3 billion in August, ending a six-month streak of consecutive monthly inflows, according to Morningstar Direct’s Fund Flows Update.
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U.S. ETFs closed the month with about $812 billion in total net assets, down 2.3% month-over-month.  

For the second straight month, international-stock ETFs have led all asset classes in terms of net inflows, thanks to strong demand for emerging-markets funds, Morningstar said. International-stock ETFs posted $4.4 billion in net inflows. Over the trailing three-year period, emerging-markets ETFs have accounted for more than 61% of all flows into international-stock ETFs.  

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SPDR S&P 500 SPY, the largest and most heavily traded ETF on the market, saw nearly $6.6 billion head for the exits in August, pushing total year-to-date net outflows for the fund to $19.1 billion. The tech-heavy PowerShares QQQ Trust QQQQ was a distant second in terms of highest net redemptions, after shedding about $2.1 billion last month. The iShares Russell 2000 Index IWM claimed the third spot on the largest outflows list with more than $1.6 billion in net outflows.  

Morningstar data showed iShares iBoxx $ High Yield Corporate Bond HYG and SPDR Barclays Capital High Yield Bond JNK, with inflows of $464 million and $332 million, respectively, led flows into junk bond ETFs, as investors took on more risk in search of more attractive yields in August. Short-term bond ETFs remained popular despite their unimpressive yields.   

Precious-metals ETFs, bolstered by inflows of $827 million into SPDR Gold Shares GLD, were the most popular ETFs in the commodities asset class in August.   

The Morningstar report is at http://www.global.morningstar.com/augflows10.
Investing September 14, 2010

Equity Outflows Continue in August

September 14, 2010 (PLANSPONSOR.com) - Long-term fund flows increased by more than 11% in August versus July, and once again the lion's share went to fixed-income funds, according to the Morningstar Direct Fund Flows Update.
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Taxable bond funds attracted $24.6 billion in new money for the month, and municipal bond funds took in another $5.2 billion. Taxable bond funds have now taken in $168.4 billion for the year to date. Alternative strategies took in $3.1 billion in August.  

Intermediate-term bond funds dominated once again, taking in nearly $11.1 billion for the month, with multisector bond and world bond funds coming in a distant second and third ($3 billion and $2.7 billion, respectively). Emerging markets bond funds remain popular, with $1.1 billion in inflows. Category assets have now reached $32 billion versus $15 billion 12 months ago.  

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On the other hand, even though the long-term bond and long government categories have enjoyed strong returns, inflows remain modest, Morningstar said. These two categories absorbed $191 million and $157 million last month, respectively.   

Meanwhile, the relentless outflows continued for U.S. Stock funds, as another $14.3 billion headed for the exits. During the past four months alone, these funds have lost a combined $48.9 billion.  

Large-growth and large-value funds are taking the brunt of investor discontent. These two categories surrendered nearly $8.6 billion in August and a combined $38.3 billion for the year to date, according to Morningstar data.  

After enduring mostly outflows since early 2009, money market funds took in $11.8 billion in August. Taxable money market funds collected more than $18.5 billion during the month, while tax-free funds saw $6.7 billion in outflows.  

PIMCO continues to lead the fund sales chart, taking in $7.7 billion in August, thanks to PIMCO Total Return’s robust $5.2 billion haul. PIMCO Fundamental Advantage Total Return and PIMCO Unconstrained Bond took in about $1 billion each.  

Vanguard posted inflows of $4 billion for the month. Total Stock Market and Total Bond Market continued to be the most popular offerings.  

On the other end of the spectrum, American Funds continued to bleed money, with nearly $5.5 billion walking out the door. Growth Fund of America absorbed the worst hit, seeing $1.6 billion in outflows. Fidelity also continues to suffer, with nearly $1.6 billion in outflows for the month.  

The complete analysis is at http://www.global.morningstar.com/augflows10.

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