Investors Redeem $2.1 Billion from Leveraged ETFs

Investors pulled $2.1 billion out of leveraged and inverse exchange-traded funds, the second month they have redeemed money from the controversial funds.

But for all ETFs in August, assets rose 3.3%, or $20.1 billion, to a total of $661 billion, according to State Street Global Advisors. Besides the leveraged ETF category, the only other category to lose assets in August was commodity ETFs, which gave up $326 million.

Scott Burns, director of ETF analysis at Morningstar, said the redemptions from leveraged ETFs were probably by smaller investors and that larger investors will probably continue to gravitate to the products.