By Chris Dieterich

NEW YORK--Investors pulled a record amount of money out of exchange-traded funds in August, but given the growth of the ETF industry, a record isn't what it used to be.

On its face, August was the worst month ever for outflows from U.S.-listed ETFs, according to BlackRock Inc. (BLK). Some $17.5 billion flowed out of all U.S. ETFs, topping the previous record for $17.1 billion, set in January 2010.

But when compared to overall assets in ETFs, the August exodus, while large, didn't even come close to a record. With $1.5 trillion held in ETFs, the money headed out the door last month accounted for 1.1% of ETF assets last month. Withdrawals in January 2010 equaled 2.2% of the $800 billion in total ETF assets at the time.

And on a longer time frame, last month was nowhere near the biggest recorded monthly outflow, according to BlackRock. Back in June 1994, the outflow of $162 million represented 29% of the nascent industry's total assets.

"Record flows can be misleading in a sense because there is not a huge history of data to support the industry yet," said Victor Lin, a director in trading strategy at Credit Suisse.

In addition, much of the investor selling last month came in the SPDR S&P 500 (SPY), the market's largest ETF, and one which is prone to big short-term swings in assets.

Still, the selling reflected worries across global stock and bond markets about the impact of the Federal Reserve dialing back its easing efforts. Then late in the month, nerves were further frayed by the possibility of U.S. military action against Syria.

Daniel Gamba, head of BlackRock's institutional iShares business for the Americas, says that the recent volatility in flows should be taken in context of what has generally been a steady stream of money heading into ETFs this year.

After taking funds each month trough May, a rocky June in the markets saw investors pull $11 billion out of U.S. ETFs, they reversed course during July, pumping in $40 billion.

"Clearly August's outflows sounds high, but when you look at in context following July's inflows, it's only about a third," Mr. Gamba said.

August's exit showed "very tactical" behavior on the part of investors in both stocks and bonds, Mr. Gamba said, meaning that rather than wholesale selling, there were specific winners and losers in different pockets of stocks and bonds.

For instance, the iShares Core S&P Mid-Cap Stock (IJH) fund took in more than $2 billion in the most recent month, the most off all ETFs.

To Dave Nadig, director of research at IndexUniverse, flows in midcap stocks showed that investors staying in U.S stocks "were reallocating away from stodgy, old companies" into smaller names that hadn't risen as quickly.

Another quirk of the data is that the bulk of August's outflows come from a single ETF goliath: The $136 billion SPY also saw the greatest amount of money leech away last month, losing $14 billion, or 80% of the total U.S. outflow. The S&P ETF is heavily used by short-term traders, both to make outright bets on the market or to use as a hedge against other positions. As a result, cash flows with the S&P 500 ETF "can fluctuate significantly from month to month," said Mr. Lin.

The SPY took in $13.8 billion in July, nearly as much as leeched out in August. And smaller ETFs that track the S&P 500--the Vanguard S&P 500 (VOO) and the iShares Core S&P 500 (IVV)--actually took in modest flows in August.

Write to Chris Dieterich at christopher.dieterich@dowjones.com;

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