Vanguard Group said exchange-traded funds (ETFs) are not responsible for higher correlations in financial markets, Bloomberg reports. ETF usage by investors in August 2011 increased the most since January 2008 because of concerns over the economic slowdown.

Investors had withdrawn $72.8 billion from equity ETFs from October 2008 through February 2009, following Lehman Brothers Holdings’ bankruptcy. In the wake of the market turmoil this year, redemptions amounted to $75 billion in the last four months. Bond funds witnessed inflows of $42.3 billion from the end of April this year through July.

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