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Gold ETF Is a Star

ETF investors piled into shares of SPDR Gold Shares to the tune of $828 million in March as currency concerns kept the metal attractive.
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NEW YORK (TheStreet) - ETF investors piled into shares of SPDR Gold Shares (GLD) to the tune of $828 million in March as currency concerns kept the metal attractive. A rise in the price of the metal helped push net assets under management up more than $1 billion, to a new high of $40.5 billion. In contrast, iPath S&P 500 VIX Short Term Futures ETN (VXX) absorbed $387 million in new money, but the fund's net asset value only increased $160 million as the price continues a year-long slide.

Inflation concerns used to be a major factor in gold buying, but one noticeable difference this month was that Treasury Inflation Protected Securities ETFs were not popular. The largest TIPS fund,

iShares Barclays TIPS


saw just $11 million in inflows, well off the inflows of $401 million in March and $1,174 million in January.

Despite being the $20 billion behemoth, TIP also saw its competitors capture more inflows last month.

SPDR Barclays TIPS


had $20 million in net inflows, bringing the total assets to $375 million.



had $202 million in net inflows and grew to $439 million in assets.

Also making the case against inflation fears as a driver of investment flows was the presence of two high-yield bond ETFs among the top 10 net inflows.

iShares iBoxx High Yield Corp Bond



SPDR Barclays High Yield Bond


saw inflows of $539 million and $480 million, respectively. If inflation led to a rise in interest rates, these funds would see their net asset value decline.

The third largest inflows were had

by iShares Barclays Short Treasury


, which holds Treasury bonds with less than one-year until maturity, with $1,663 million in net inflows. SHV yields almost nothing due to the short duration of the bonds and the extremely low interest rate environment. Investors appear to have moved to the shorter end of the yield curve, as

iShares Barclays 1-3 Year Treasuries


had $318 million in outflows.

Other leading outflows came from small caps, foreign and domestic.

iShares Russell 2000


had $1,000 million in outflows;

Vanguard MSCI Small Cap


had $519 million.

With all the concern surrounding Greece and the euro,

PowerShares DB U.S. Dollar Index Bullish Fund


still had $424 million in outflows, good for fifth largest, but

ProShares UltraShort Euro


did have $40 million in inflows.

Also notable was the continued migration of assets from

iShares MSCI Emerging Markets



Vanguard MSCI Emerging Markets


. Investors put $774 million into VWO last month and removed $695 million from EEM; this trend has been due to VWO more closely tracking the index.

For the leveraged ETFs,

Direxion Daily Financials Bull 3X


saw outflows of $563 million, while

Direxion Daily Financials Bear 3X


had $499 million in inflows. FAS gained 30% in March, while FAZ lost 30%.

Overall, there was $20 billion in net inflows into ETFs in March. More than one-third of those flows went to State Street Global Advisers of the SPDRs fame, while more than 25% went to Blackrock and about 13% to Vanguard.

There was a mix of trends in March, with bearish investors buying FAZ and VXX, despite losses, while those concerned about inflation appeared to focus on gold. Investors seemed split on bonds, however, with high yield and the most short term Treasuries seeing buying activity. However, the move into short term bonds and VXX may also be a sign that investors became more cautious as March wore on and the indexes steadily climbed higher.

At the time of publication, Dion owned IAU TIP HYG.

Don Dion is president and founder of

Dion Money Management

, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.