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November was a pretty rocky month for markets as choppy trading in the beginning of the period gave way to a steep drop right before the Thanksgiving break. However, thanks to some solid American data and a global liquidity push by central banks, most of these losses evaporated and the broad market finished the month flat. Yet while many indexes may have finished where they started, the same cannot be said for a number of ETFs in respect to their assets under management. The extreme volatility pushed investors to radically alter their portfolios and led to some huge gains in AUM—as well as huge losses—for certain sections of the ETF world.
According to data from IndexUniverse, there were a few ETFs that added more than a billion dollars in assets over the course of November. Leading the way was (GLD - ETF report) which added close to $3.1 billion, trailed by the Vanguard Small Cap Fund (VB - ETF report) and the Vanguard Total Bond Market (BND - ETF report) which both added about one billion in the period. Beyond these three, gains were also seen in a number of bond ETFs stretching across a variety of sectors. In fact, among the top ten gainers in terms of AUM four were bond funds including a short-term Treasury product, (SHY - ETF report), and the iShares Barclays TIPS Bond Fund (TIP - ETF report). This suggests that investors are growing increasingly concerned over the health of the economy and are seeking to dial back risk to equities. However, investors should also note that a number of small cap equity funds were among the big winners for the period as well, implying that some investors are at least willing to take a risk on securities that do not have as much global exposure and are somewhat insulated from Europe’s woes (see Top Three Precious Metal Mining ETFs).
Meanwhile, on the asset outflows side, popular stock-based ETFs dominated the top ten spaces. (SPY - ETF report) lost more than $4.2 billion in assets while the iShares Russell 2000 ETF (IWM - ETF report), the iShares S&P 500 ETF (IVV - ETF report) and the Financial Select SPDR (XLF - ETF report) lost, respectively, $3.3 billion, $1.5 billion, and $1.0 billion in the month. In fact, XLF saw outflows of nearly half a billion dollars right before Thanksgiving and was unable to recoup hardly any of these losses despite the market surge after the Holiday break. Beyond financials, a number of other Sector SPDRs were also among the top ten losers in terms of AUM as well as (QQQ - ETF report) and (VWO - ETF report), suggesting that investors were dialing back exposure to risky assets and that any inflows that came as a result of the end of the month surge were not enough to make up for the outflows earlier in the period (also read Airline ETF In Focus As AMR Lands In Bankruptcy).
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Author is long VWO.