Fund action - Friday, October 10, 2008

ETF Investors Look For Safety

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A flight to safety by investors kept exchange-traded funds from bleeding assets during the month of September. While the $579.5 billion in ETF assets is a loss of about $2.9 billion for the month, according to the latest ETF Snapshot from State Street Global Advisors. The loss is modest compared to most equity indexes, which lost about 10%, said Tom Anderson, head of ETF strategy and research at SSGA.

Many investors headed for bond ETFs, which gained about $1.1 billion, and investors also sought the safety of gold ETFs, which helped to increase commodity ETF assets by $3.2 billion, nearly 11%, as of Sept. 30. The biggest decline came in international ETFs, which were down about $13.4 billion, or 10.3%—about in line with international equity indexes, said Anderson.

The biggest surprise was the movement out of inverse ETFs, which about $2.7 billion, or 12%. "That was a sharp reversal and surprising considering that it was such a negative month for the equity market," said Anderson. He added that temporary restrictions on short selling may have caused the drop in ETFs that short financials.

Nine new ETFs were launched and 15 were liquidated, bringing the total of ETFs available in the U.S. to 704 as of Sept. 30.

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ETF Investors Look For Safety

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