ETF Investors Buy in May

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June 5, 2009 7:39am NYSE:EEM NYSE:EWT

mayETF investors seemingly ignored the old stock market adage: “Sell in May and go away.” In fact, the ETF industry posted its best month of the year, in terms of net inflows, attracting more than $14 billion in new assets during the month. For some context, this compares with May 2008 net ETF inflows of about $3.3 billion. Leveraged and inverse ETFs accounted for about 11% of the month’s net inflows, versus 27% last month.

The impressive inflows of the past month helped push the industry’s year-to-date total net inflows to more than $20.5 billion. With the markets showing resiliency in holding on to gains from its recent rally, we’re seeing investors start to regain their appetites for risk. A sign that optimism about the economy is growing can be seen in the bond markets; the yield on the 10-year Treasury note is now at its highest level since November, rising almost a complete percentage point since the end of April. 


Emerging markets continued to shine in May. As seen in the table below, five emerging-markets ETFs– iShares MSCI Emerging Markets (EEM),  iShares FTSE/Xinhua China 25 Index (FXI),  iShares MSCI Brazil (EWZ),  Vanguard Emerging Markets Stock ETF (VWO), and  iShares MSCI Taiwan (EWT)

Full Story: http://news.morningstar.com/articlenet/article.aspx?id=294444


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