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ETF Specialist

Leveraged ETFs See Outflows in July

While total industry flows were up for another consecutive month, 'exchange-traded derivative funds' finally took a breather.

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Overall, the ETF industry attracted more than $9 billion in new assets in July, bringing the year-to-date net inflows to about $43 billion. This, along with the market's impressive rally, propelled total industry assets under management to nearly $653 billion from just over $500 billion at the beginning of the year.

After several months of explosive growth, leveraged and inverse ETFs experienced their first month of net outflows in July. These aggressive products, which have been the center of controversy in the ETF industry over the past several weeks, had taken in about $11.4 billion in net inflows through the first half of the year (through the end of June, leveraged and inverse products made up more than 33% of total industry inflows). Since the beginning of 2007, there have been only two other months in which these popular products experienced net outflows: December 2007 and September 2008.

John Gabriel does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.