Inflation Drove September ETF Flows

Investors poured into anti-dollar and anti-inflation investments in September, as the five top funds captured more than 50% of total net inflows.

SPDR Gold Shares(GLD Quote), was tops with $2 billion in net inflows. It was followed by iShares Barclays (BCS Quote) TIPS(TIP Quote), $847 million; Vanguard MSCI Emerging Markets(VWO Quote), $770 million; iShares MSCI Emerging Markets (EEM Quote), $651 million; ProShares UltraShort 20+ Year Treasury(TBT Quote), $538 million.

The top five outflows were led by the SPDR S&P 500(SPY Quote), $1,795 million; iShares MSCI Japan(EWJ Quote), $725 million; Diamonds(DIA Quote), $614 million; SPDR Energy(XLE Quote), $420 million; iShares Barclays Short Treasury (SHV Quote), $331 million. (SHV is not an inverse ETF.)

Another fund seeing a large outflow was iShares FTSE/Xinhua China 25(FXI Quote), with $247 million in net outflows. FXI saw huge outflows in August when Chinese stocks corrected, and the selling continued into September. Assets under management (AUM) increased, however, as the underlying assets appreciated.

One of the fastest-growing ETFs in September was Direxion Daily Real Estate Bull 3X (DRN Quote). It saw inflows of $69 million and AUM of $125 million on Sept. 30. DRN had inflows of $152 million in August, but volume nearly doubled from $588 million in August to $1.026 million in September.

Another grower was ProShares Short 20+ Year Treasury(TBF Quote), launched in August and which offers one times inverse exposure to the Barclays 20+ Year Treasury Index. AUM climbed from $5 million in August to $31 million in September, and volume went up almost eight times.

One of the fastest-shrinking ETFs was PowerShares Dynamic Retail(PMR Quote), which saw $39 million in outflows and AUM of $25 million at the end of September. ETNs with large outflows included PowerShares DB Base Metals Short ETN(BOS Quote), PowerShares DB Crude Oil Short ETN(SCO Quote) and iPath Sugar ETN (SGG Quote). Sugar was a hot commodity in August, but the speculative run waned last month. The PowerShares funds may have suffered from the halo-effect of the closing of PowerShares DB Crude Oil Double Short.