If nothing else, ETFs are hardy little buggers.
According to an IndexUniverse report, overall flows into U.S.-listed exchange-traded products were about $4.11 billion in May. Of course, that was thanks to investors’ bloodlust for bonds, which mostly offset their rapid-fire exodus from equities (by about 6%-7%, if you’re counting), putting ETF total assets just below April’s record $1.138 trillion under management.
A fantastic collusion of eurozone bleeding, concerns over slowdowns in the roaring emerging markets of China and India, and a mass checkout for summer have made the line for fixed-income funds longer than the thrill-seekers’ queue for Cedar Point’s Maverick. Even a record-low yield that’s dangerously approaching CD levels isn’t scaring people off from 10-year Treasurys.
Investors rushed to safety in May, with seven of the month’s 10 most-popular funds focused on fixed income — including the life of the party, the Vanguard Total Bond Market ETF (NYSE:BND), which brought in $1.23 billion, according to IU data. Vanguard rode the success of BND and other funds to become the top firm in asset gathering, adding $6.7 billion in assets, while BlackRock’s (NYSE:BLK) iShares and State Street’s (NYSE:STT) Global Advisors division saw respective outflows of $683.5 million and $1.78 billion.
However, investors were at least discerning about their bonds in May. Two junk-bond ETFs — the SPDR Barclays Capital High Yield Bond ETF (NYSE:JNK) and iShares iBoxx $ High Yield Corporate Bond Fund (NYSE:HYG) — saw a respective $1.17 billion and $522.1 million in outflows, making them IndexUniverse’s Nos. 2 and 9 “Biggest Losers.” JNK has more than wiped out all its gains through the first four months of 2012, finishing May down 1% for the year.
IndexUniverse’s No. 1 “Biggest Loser” was the iShares MSCI Emerging Markets Index Fund (NYSE:EEM), which saw $1.54 billion head for the doors.
The flight from junk bonds smacks in the face of news from earlier in the month that Vanguard would be closing its High-Yield Corporate Fund (MUTF:VWEHX) to “most new accounts” because of excessive cash inflows.
The full report can be viewed at IndexUniverse.