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GLD Loses Silver Medal to Emerging-Market Fund

IndexUniverse.com just released its April 2013 ETF Fund Flows data. The story validates a trend that all investors should be aware of in 2013.

Namely, that U.S. stocks are the place to be.

On Friday, the Dow Jones Industrial Average hit 15000 during intraday trading before finishing slightly below that mark, and the S&P 500 managed to close well above 1600. Year-to-date, the S&P is up over 13%.

That’s where the profits have been, and judging by fund flows, that’s where investors continue to expect the profits to be. Investors continue to put cash into U.S. exchange-traded funds.

That has caused a shakeup in the ranking of the most popular ETFs by assets.

Here are the details:

  • Gold Tarnished: Investors withdrew $6.77 billion out of SPDR Gold Shares (NYSE:GLD), the top gold bullion ETF. GLD ended April with a whopping 19% less in assets than it had at the end of March. I’ve been mentioning the risk of redemptions and cascading risk in gold funds since March, so keep an eye on this.
  • Emerging Markets: The new No. 2 fund by assets is the Vanguard FTSE Emerging Markets ETF (NYSE:VWO) at $57.7 billion, which leapfrogged GLD despite losing assets itself. The SPDR S&P 500 ETF (NYSE:SPY) is tops by a lot at $132 billion AUM)
  • Keeping Money In: Despite cashing out of gold and EM stock funds, investors are not throwing in the towel. Net ETF inflows totaled nearly $10 billion with U.S.-listed ETF assets up 1.6% over March to a new record of $1.49 trillion.
  • Japanese Exuberance: The iShares MSCI Japan Index Fund (NYSE:EWJ) continues to see big popularity thanks to Abenomics and a huge run for Japan issues in 2013. It pulled in $2.72 billion in April, making it the most popular ETF last month, and EWJ is up over 20% year-to-date.

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Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.

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