August ETF Asset Report: Treasury Bonds Prevail - ETF News And Commentary

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The ETF industry saw solid asset growth in August as the U.S. market saw a winning rally following a slump in July. In fact, August saw investor interest both in stocks and bonds.   Certain global events at the end of the month had a last-minute impact on the monthly asset report and could prove to be game changers in the months ahead.

Among these, the S&P 500 index's maiden crossing of the 2K mark and hint of QE in the Euro zone are worthy of mention. Let's find out the top gainers and losers in terms of asset growth in August (source: etf.com).  

Top Winners

In August, iShares 7-10 Year Treasury Bond ETF IEF – a replication of long-term U.S. treasuries – was the top asset gatherer, hauling in around $1.47 billion. Such a huge inflow suggests optimism around the long end of the yield curve. IEF manages an asset base of around $7.75 billion (read: Long-term Treasury ETFs Back in Focus).

Overall, treasuries dominated the month across the yield curve as the short-term treasury ETF iShares 1-3 Year Treasury Bond ETF (SHY) was the third highest asset gatherer and the intermediate term treasury ETF iShares 3-7 Year Treasury Bond (IEI) took the ninth place. A low interest rate environment has encouraged investors to pour money into this investing corner.

The runner up was Vanguard S&P 500 (VOO) tracking the S&P 500 Index. Another ETF linked to the S&P 500 index – iShares Core S&P 500 (IVV) – was the fourth largest asset accumulator in the month. As much as $1.24 and $1.19 billion flowed into VOO and IVV, respectively, during August.

This indicates investors' positive sentiment over the broader U.S. stock market index. Notably, Vanguard funds lately garnered immense investor attention thanks to their low-cost nature. Vanguard has now become the second largest issuer. 

Apart from these, emerging market ETF – iShares MSCI Emerging Markets (EEM) – was the fifth largest asset creator. Emerging market stocks bounced back strongly this year on compelling valuations and political reforms in some key nations spurring investors to invest about $883 million in EEM (read: Emerging Market at 3-year High: 3 ETFs Worth A Look).

Top Losers

Though the S&P 500 was the favorite among investors when it came to investing in VOO and IVV, SPDR S&P 500 (SPY) was ironically the biggest loser in August. The fund has seen around $7 billion in outflow and had $171.6 billion in assets at the end of the month.
iShares Core S&P Mid-Cap (IJH) witnessed the second largest asset redemption worth $1.35 billion in August. Europe was also out of favor last month as iShares MSCI EMU (EZU) shed about $1.31 billion in assets. Another Europe-based ETF Vanguard FTSE Europe ETF (VGK) also observed $687.6 million in outflow (read: Euro Zone Gets QE Hints, 3 ETFs to Buy on Stimulus Hopes).  

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