International Stocks Rev Up January ETF Flows
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Thursday, February 07, 2013

International Stocks Rev Up January ETF Flows

On the heels of a strong December, ETFs saw inflows of $28.6 billion in January to mark the two strongest consecutive months of inflows tracked by Morningstar and the 20th straight month of inflows overall, according to the latest flow report by Morningstar.

The fund researcher reported that "the industry has been eagerly awaiting an uptick of flows into U.S. stocks and out of bonds, but it was international-stock ETFs, particularly emerging markets offerings, that led the way in January."

Interesting bits from the report include:
  • iShares MSCI Emerging Markets Index ETF topped all ETFs with inflows of $3 billion in January.
  • Sector stock inflows picked up in January, allowing financial and real estate sector ETF assets to hit record levels.
  • At the firm level, iShares led all providers with inflows of $12.7 billion, while Vanguard took in $10.3 billion. State Street saw outflows of $3.4 billion, dragged down by outflows of $6 billion and $1 billion from SPDR S&P 500 SPY and SPDR Gold Trust, respectively.

  • According to the report, "flows were driven by international-stock ETFs, where diversified emerging-markets funds have been particularly strong, averaging a record $6 billion over the past two months. Flows into sector stock ETFs picked up in January allowing financial and real estate sector ETF assets to hit record levels. Flows into U.S. stock ETFs moderated somewhat."

    Meanwhile, "at the fund level, iShares MSCI Emerging Markets Index (EEM) topped all ETFs with a $3 billion inflow. The fund appears to have benefited from Vanguard's decision to switch index providers to FTSE from MSCI. Since October, EEM has attracted $11 billion in net flows, while Vanguard FTSE Emerging Markets ETF(VWO) has attracted less than $1 billion. The iShares ETF had been the largest emerging-markets ETF, but VWO usurped the lead in early 2011 as it had better performance and an expense ratio that is 0.49% lower. "

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