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Matthew Lemieux by Beverly Chandler, Opalesque London:

Matthew Lemieux, research analyst with Lipper in Denver, cautiously welcomed the apparent strength of the ETF market with figures showing that despite difficult markets, ETFs enjoyed another month of net inflows in July.

"After another month of negative performance in most markets, July 2011 will be remembered most for the debt-ceiling standoff in Washington. As policymakers seemed to be playing chicken with the full faith and creditworthiness of the U.S., investors were trying to quantify the risk and impacts of such a failure in government" he says. "And if that were not enough, the persistent storm in Europe was building as sovereign concerns began to shift away from small periphery nations such as Greece to the third largest bond market in the world—Italy."

Despite all this, exchange-traded funds (ETFs) ended the month of July with net inflows of $11.3 billion—the second largest monthly inflows so far this year with Equity ETFs (+$8.8 billion) receiving the most interest, benefiting from both bulls and bears as money moved into S&P 500 and precious metals products. However bond ETFs saw their lowest monthly inflows since February of this year with $2.5 billion of net new monies. Lemieux says: "Although flows were positive, a general aversion to U.S. Treasury-based products meant the asset class posted its lowest monthly inflows since February 2011."

In terms of equity ETFs, Lipper’s USDE ETFs macro-classification was ......................

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