ETF Assets decrease by $35.91 billion in January
March 6, 2009

SAN DIEGO (ETFguide.com) –According to the Investment Company Institute (ICI), the combined assets of U.S. exchange-traded funds fell by $35.91 billion to $495.38 billion in January.

This is a 6.8% decrease compared to December and a decrease of 12.9% or $73.35 billion compared to January 2008, when ETF assets were $422.03 billion.

During January, the value of all ETF shares redeemed exceeded that of shares issued by $17 million. In January 2008, ETFs have experienced a net redemption of $4.43 billion.

Providers of inverse performing or short ETFs had strong inflows. Direxion Shares pulled in $845 million and ProShares attracted $388 million in net cash flow.

Surging gold prices has boosted the demand and interest in gold ETFs. The SPDR Gold Shares (NYSEArca: GLD) just surpassed $30 billion and is now the second largest U.S. listed ETF in terms of assets. 

At the end of February, the three largest ETF managers in the U.S. were Barclays Global Investors ($213.60 billion), State Street Global Advisors ($128.60 billion), and the Vanguard Group ($39.84 billion).

The combined number of listed ETFs/ETNs declined in February to 843 from 856 in January.

The bulk of ETF money is in just a handful of funds like the SPDRs S&P 500 (NYSEArca: SPY), the iShares MSCI EAFE Index Fund (NYSEArca: EFA) and the iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM). Together these funds alone account for just over $128 billion or just over one-quarter percent of all ETF assets.

A number of entrants are expected to introduce new ETFs in the coming months. Among these firms are Charles Schwab and PIMCO.  

ETFs are low cost index funds that trade like stocks. ETNs are debt instruments backed by issuing financial institutions whose performance is linked to the performance of a security or index.

The Investment Company Institute (ICI) is a national association of U.S. registered investment companies.

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