BGI: ETFs End Q105 at $228B in Assets

April 20, 2005 ( - Increasingly popular exchange-traded funds (ETF) took in $9 billion in net new investments in the January to March period, pushing asset totals to $228.3 billion, according to ETF provider Barclays Global Investors (BGI).

In March, ETFs saw net new investments of $9.7 billion and ended the month after a $5 billion drop in market value of the underlying securities, Dow Jones reported. That compares with February’s $5.7 billion redemptions, when assets totaled $223.6 billion.

BGI said that, with many investors fearing the impact that rising inflation, record gasoline prices and higher interest rates could have on consumer spending, short interest in the iShares Dow Jones US Consumer Services Fund rose to 26% of shares outstanding in March, from 11% of shares outstanding in February.

Rising rates also continued to take a toll on real-estate investment trusts, as assets in real-estate-sector ETFs fell 6% during the month, the announcement said.   The iShares Russell 2000 Index Fund was the most popular fund in March, attracting $1.7 billion in new investments.

Most international investments delivered negative returns in March, as the dollar improved and US rates rose, Barclays Global Investors noted. However, demand for international developed-market exposure remained constant, especially Pacific Rim markets (but excluding Hong Kong). The iShares MSCI EAFE Fund was the third most popular iShares fund in March and the most in demand during the first quarter, with new investments totaling $460 million and $1.9 billion, respectively, the company said,

BGI, which offers 98 domestic ETFs under the iShares moniker, had assets in its funds of $122.1 billion.

The increasingly popular funds, which trade all day on exchanges like stocks, saw explosive growth last year, climbing nearly 50% to a record $226.1 billion in assets at the end of 2004.