ETF Flows Bounce Back – Especially EM

via, some interesting info on ETF flows during the month of April:

Investors poured more than $20 billion into U.S.-listed ETFs in April—a third more than in the entire first quarter—pushing total ETF assets to a record high of $1.762 trillion. The bulk of those assets landed in equities funds, particularly emerging market ETFs…Funds like the iShares MSCI Emerging Markets ETF (EEM) and the Vanguard FTSE Emerging Markets ETF (VWO) were among the month’s most popular strategies, raking in $3.9 billion and $651 million, respectively. EEM was the top gainer in the month.

In a broader sense, the pace of flows into ETFs this year is lagging that of 2013, when total net inflows topped $188 billion for the year—a record. So far this year, investors have poured slightly more than $35 billion into U.S.-listed ETFs, about a third of which landed in fixed-income funds.

The record assets of $1.762 trillion are up 3.5 percent year-to-date from $1.701 trillion, and 18.2 percent above the $1.490 trillion at the end of the same year-earlier month of April 2013.

The thing that jumps out at me is the newly-valuation conscious flows we’re seeing toward emerging markets. A lot of ETF activity is driven by financial advisors and many advisors pride themselves on the ability to ignore recent performance and focus their allocations on what might come into favor down the road.

Emerging markets have spent the last one, three and five year periods lagging behind US and developed market equities – with plenty of good reason. They’re coming back into vogue before there’s any news or reason for them to be. The answer is in the relative discounted multiples these stocks and countries sell for after so much time in the doghouse.


April Flows: Emerging Market ETFs Shine (

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