June ETF Market Recap

June was yet another month marked by choppy fund flows. While natural gas and retail ETFs did well, emerging market performance varied considerably -- in particular, one should note the switch from iShares MSCI-Emerging Markets(EEM Quote) to Vanguard MSCI Emerging Markets(VWO Quote) -- this phenomenon is attributed to a sizeable difference in expense ratios, as well as the recent overall outperformance of VWO.

Also notable was the shift from SPDRs(SPY Quote) to iShares S&P 500 Index(IVV Quote), though they have very similar expense ratios. The sheer size and time on the market of both EEM and SPY may also have been factors.

Assets in U.S. listed ETFs and ETNs totaled roughly $603.5 billion by the end of June, with the number of listed products increasing by 33, to a current total of 837. Meanwhile, June 2009 net cash inflows totaled approximately $12.4 billion, and year-to-date net cash inflows totaled approximately $41.9 billion.

In terms of specific funds, U.S. Natural Gas (UNG Quote) dominated the market with $1,698 million in new funds over the past month. Meanwhile, iShares Barclays TIPS (TIP Quote) saw $942 million in new money, Vanguard MSCI Emerging Markets (VWO Quote) $777 million, SPDR Retail (XRT Quote) $709 million, and iShares S&P 500 Index $642 million.

Meanwhile, in part due to Vanguard MSCI Emerging Markets' lower expense ratio (0.27, versus EEM's 0.72), iShares MSCI-Emerging Markets (EEM Quote) suffered heavy outflows in June, falling by whopping $1,671 million. Vanguard MSCI Midcap (VO Quote) saw $863 million exit; US Oil Fund (USO Quote) had outflows of $710 million; and SPDR S&P 500 Index and SPDR Healthcare (XLVl Quote)(XLV) both declined ($525 million and $457 million, respectively).

Overall, June's most attractive ETFs for investor dollars were commodities and retail sectors, with a decline in the health care sector, and a notable shift between emerging market and S&P 500 Index ETFs.