Dion's ETF Report Card for August - TheStreet

NEW YORK (TheStreet) -- August's ETF fund flow data compiled by the National Stock Exchange (NSX) was released late last week. As usual, this data provided interesting insight into what was going through investors' minds during the volatile month.

In terms of overall performance, the totaled assets of the ETFs represented in the data increased to $815 billion in August, up from the $671 billion from the same time last year. Month over month, however, assets slipped from $835 billion in July.

The global and international section of the ETF universe saw the largest uptick in net cash flow in August as investors remained fearful of domestic equities. This slice of the industry grew by $4.5 billion.

Emerging markets, in particular remained a popular destinations and the closely watched battle between the

Vanguard Emerging Market ETF

(VWO) - Get Report

and the

iShares MSCI Emerging Market Index Fund

(EEM) - Get Report

continued to rage. In August, VWO gained ground on its iShares competitor, amassing $1.9 billion in flows versus the $1.8 billion which flowed into EEM.

VWO and EEM actually saw the largest inflows across the entire ETF industry over the past month.

Emerging market funds topped the list seeing the most flows, but not surprisingly, the biggest overarching theme of August was defense. For the most part, investors appeared to avoid equities, opting instead for the safety and comfort of bonds and gold.

Physical gold, in particular was a popular destination. After VWO and EEM, the

SPDR Gold Shares

(GLD) - Get Report

saw the next largest inflows. This fund saw $800 million in inflows.

iShares Gold Trust

(IAU) - Get Report

, meanwhile, saw $180 million flow into the fund.

While physical gold was attractive, gold miners struggled.

Market Vectors Gold Miners ETF

(GDX) - Get Report


Market Vectors Junior Gold Miners ETF

(GDXJ) - Get Report

saw $240 million and $13 million exited the fund.


iPath S&P 500 VIX Short Term Futures ETN

(VXX) - Get Report

saw a big uptick in flows as well, jumping $604 million as investors sought ways to play the volatile market conditions.

The bond industry proved attractive as investors seeking safety poured into secure holdings. High yield bonds proved particularly popular with the

iShares $ iBoxx High Yield Bond Index Fund

(HYG) - Get Report


SPDR Barclays High Yield Bond ETF

(JNK) - Get Report

managing to seeing close to $500 million and $370 million flow into the fund in August, respectively.

An interesting split, however, appeared within the long term bond category. Although most, including the

Vanguard Extended Duration Treasury ETF

(EDV) - Get Report

saw inflows, in what is a noticeable deviation from the flight towards safety, the

iShares Barclays 20+ Year Treasury Bond Fund


(TLT) - Get Report

saw big outflows as $426 million exited the fund in August.

While market volatility caused many investors to shy from stocks in August, yield-focused equity-based ETFs including

iShares Dow Jones Select Dividend Index Fund

(DVY) - Get Report


PowerShares U.S. Preferred Stock Portfolio

(PFF) - Get Report

still managed to score gains. DVY took in $200 million while PFF gathered over $450 million.

The biggest losers of the month were broad domestic equity index-based products. The


(SPY) - Get Report


PowerShares QQQ



iShares Russell 2000 Index Fund

(IWM) - Get Report


SPDR Dow Jones ETF

(DIA) - Get Report

saw the heaviest outflows, with $6.6 billion, $2.1 billion, $1.8 billion, and $600 million leaving the funds respectively.

In an interesting and unnerving turn of events, investors once again warmed up to the

United States Natural Gas Fund

(UNG) - Get Report

, pouring nearly $250 million into the fund. I continue to urge investors to avoid this ETF. Given this fund's troubling past and the threat of increased government regulation over commodities futures, investors run a big risk stepping into this fund. As expected, the August flow data compiled by NSX proved insightful. Looking to September, it will be interesting to see what new trends will develop.

-- Written by Don Dion in Williamstown, Mass.

At the time of publication, Dion Money Management was long PowerShares QQQ, iShares $ iBoxx High Yield Bond Index Fund, iShares Gold Trust, Market Vectors Gold Miners ETF, iShares Dow Jones Select Dividend Index Fund.

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.