Morningstar Says ETF Assets Topped $1 Trillion in February

U.S. exchange traded fund (ETF) inflows reached $6.8 billion in February and ETF industry assets totaled nearly $1.1 trillion at the end of February, marking a month-over-month increase for the sixth consecutive month, Morningstar reported Monday.

Flows into long-term mutual funds fell slightly, hitting $27.9 billion in February, below January’s total of $29.8 billion.

In Morningstar's monthly report of estimated U.S. mutual fund and ETF asset flows, the Chicago-based investment research firm also said that money market funds reversed course with inflows of $16.7 billion in February after outflows of more than $75.9 billion in January.

Other highlights from Morningstar’s report on mutual fund flows include:

• Taxable bond and U.S. stock remained the two most popular asset classes, taking in $11.9 billion and $10.1 billion, respectively.
• The combined inflows of $25.9 billion seen by U.S. stock funds in January and February are the most investors have added to the asset class during those same two months since they contributed $44.8 billion in 2004. Large-cap categories saw greater inflows than their small-cap counterparts.  
• U.S. stock ETFs, with inflows of $5.7 billion, drove overall ETF inflows again in February, even though inflows to the asset class were down roughly 55% from the previous month.
• International-stock ETFs saw outflows of $3.3 billion in February, the most of any ETF asset class. Four of the 10 ETFs with the greatest outflows during the month were iShares MSCI All Country Asia ex Japan and Vanguard MSCI Emerging Markets.
• Municipal-bond funds were the only asset class to see outflows, but the pace of redemptions slowed to $4.4 billion following outflows of $12.5 billion in January.
• Taxable-bond funds remained popular. After collecting $5.6 billion in January, bank-loan funds added another $4.8 billion in February. The combined inflows of $10.4 billion during the first two months of 2011 is greater than the inflows recorded for the category during the same period in any prior year.

Read about Strategic Insight’s February fund flows at AdvisorOne.com.