May ETF Asset Report: U.S. and Japan Prevail, Gold Suffers - ETF News And Commentary
June 10 2013 - 10:00AM
Zacks
The ETF industry has seen solid asset growth in May as global
markets, and especially the U.S., continued the upward trend.
However, at month end, the market started to show volatility, which
has been felt in the early part of June as well.
Funds like SPDR S&P 500 (SPY) and
WisdomTree Japan Hedged Equity (DXJ) were the
highest asset gatherers in the month. With improving U.S. economic
indicators, the S&P 500 advanced around 3.0% during this time
period, which helped raise interest in the following funds:
Top Gainers May 2013 ($, Million)
Ticker
|
Fund
|
Inflows ($, mil)
|
AUM ($, mil)
|
SPY
|
SPDR S&P 500
|
3,295.83
|
138,506.84
|
DXJ
|
WisdomTree Japan Hedged Equity
|
2,385.04
|
9,900.70
|
IEI
|
iShares Barclays 3-7 Year Treasury Bond
|
1,611.72
|
3,850.30
|
XLF
|
Financial Select SPDR
|
1,537.95
|
13,940.42
|
EWJ
|
iShares MSCI Japan
|
1,214.87
|
11,230.20
|
*Source: Indexuniverse
Meanwhile, yields on the 10-year Treasury rebounded from its
record low and currently stand above 2%. This suggests that
investors are certainly buying into concerns over the Fed tapering
off the monetary stimulus program (Read: Long-Term Treasury Bond
ETF Investing 101).
Meanwhile, on the other side of the world, Japan’s target of 2%
inflation backed by an easy monetary policy led to a surge in its
equity market which suffered low growth and deflation for a long
time. Japanese equities got a solid boost post leadership
changes.
The pace of inflow into Japanese stock ETFs this year is already
more than double the levels seen in 2012 and 2011, suggesting that
investors are certainly buying into these new policies. However,
June has seen significant volatility—and losses—for the Japanese
equity market, so we may see a bit of a reversal in these figures
starting at the next monthly asset report.
Top Winners
In May, the SPDR S&P 500 (SPY) was the top
asset gatherer, hauling in around $3.3 billion. This fund tracks
the S&P 500 Index and such a huge inflows suggests optimism
around the broader US market as the S&P 500 Index is considered
a good proxy for the U.S. stock market. SPY manages an asset base
of around $139 billion and charges 9 bps in fees and expenses.
The runner up was WisdomTree Japan Hedged
Equity (DXJ) tracking the Japan Hedged Equity Index. This
fund saw an inflow of around $2.4 billion and has amassed around
$9.9 billion. With about 275 stocks in its basket, DXJ charges 48
bps in fees. The fund has considerable exposure in Industrials,
Consumer Discretionary and Information Technology (Read: DXJ--Best
ETF to Play the Japan Rally).
In order to tap Japan’s growth story, investors also poured
money into another Japan oriented fund iShares MSCI Japan
Index Fund (EWJ) which accumulated $1.2 billion assets
last month to reach a total of $11.2 billion.
However, we expected the Japanese equities to lose their winning
momentum in the coming month as the US dollar witnessed its largest
single-day decline in three years against yen in the first week of
June.
Another ETF – iShares Barclays 3-7 Year Treasury
Bond (IEI) tracking the Barclays Capital U.S. 3-7 Year
Treasury Bond Index – was a top gatherer in May. As much as $1.6
million flocked into the fund thanks to its lower risk profile and
minimum worries over interest rate risks.
Top Losers
Not all funds saw as much interest in the month. There are also
funds which lost assets considerably in May. These inlude:
Biggest Losers May 2013 ($, Million)
Ticker
|
Name
|
Outflows
|
AUM ($, M)
|
GLD
|
SPDR Gold
|
-2,945.81
|
45,403.87
|
EEM
|
iShares MSCI Emerging Markets
|
-1,976.86
|
41,780.47
|
XLV
|
Health Care Select SPDR
|
-1,040.07
|
7,051.52
|
IWM
|
iShares Russell 2000
|
-1,016.66
|
21,068.67
|
UWM
|
ProShares Ultra Russell 2000
|
-987.34
|
146.45
|
*Source: Indexuniverse
The SPDR Gold Shares (GLD) tracking Gold
Bullion has seen around $3 billion in outflows and stood at $45.4
billion in assets at the end of the month; down 11% sequentially.
The product has been downbeat since the beginning of the year.
Growing optimism surrounding the U.S. economy and some remedial
measures taken in Eurozone shifted investors’ attention from the
physical asset ETF to equity markets (Read: Have We Seen the Bottom
in Gold ETFs?).
iShares MSCI Emerging Markets (EEM) fund,
tracking the MSCI Emerging Markets Index, saw asset drainage of
about $2.0 billion to $42 billion in May. A focus on the domestic
recovery along with concerns of slower growth in some emerging
markets like China, Brazil might have resulted in assets gushing
out of the fund.
HealthCare Select Sector SPDR ETF (XLV)
tracking the Healthcare Select Sector Index lost about $1.0 billion
in assets in the May. Still, health care has been a strong
performer, and this losing trend may not continue, especially if
investors can look past Obamacare uncertainties.
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WISDMTR-J HEF (DXJ): ETF Research Reports
ISHARS-EMG MKT (EEM): ETF Research Reports
SPDR-GOLD TRUST (GLD): ETF Research Reports
ISHARS-BR 3-7TB (IEI): ETF Research Reports
SPDR-SP 500 TR (SPY): ETF Research Reports
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