Last week, ETFs pulled in $8.1 billion in capital, bringing year-to-date inflows to almost $120 billion. U.S. fixed-income led the way higher with $7.6 billion in inflows, closely followed by $1.4 billion in international fixed-income ETFs and $416 million in commodities ETF, per etf.com.
As such, SPDR S&P 500 ETF Trust SPY, Vanguard Total Stock Market ETF VTI, iShares 20+ Year Treasury Bond ETF TLT, iShares iBoxx USD High Yield Corporate Bond ETF HYG and iShares Core U.S. Aggregate Bond ETF AGG dominated the top creation list last week.
Wall Street saw mixed performance last week. The S&P 500 and the Dow Jones Industrial Index fell for a second consecutive week, by 0.29% and 1.11%, respectively, while the tech-heavy Nasdaq Composite Index gained 0.4%. Weak economic data and debt ceiling concerns led to a decline in the stock market.
U.S. consumer sentiment plummeted to a six-month low in May on the debt ceiling debacle, per the preliminary reading on the University of Michigan’s consumer sentiment index. President Joe Biden's administration warned of "catastrophic" consequences for the U.S. economy if the country defaults. The US Treasury Department expects to be able to pay the U.S. Government's bills only through Jun 1 without a debt limit increase (read: ETFs to Bet on Mega-Cap Tech Stocks).
The outperformance for the Nasdaq Index came on the back of a strong conviction for tech stocks. Inflation in the United States slowed for the tenth consecutive month in April. The consumer price index rose 4.9% in April, down from a 5% rise in March and a 40-year high of 9.1% last June. This is the smallest yearly increase since April 2021 and raised the prospect that the Fed might pause interest rates hike, boosting tech stocks.
We have detailed the ETFs below:
SPDR S&P 500 ETF Trust (SPY)
SPDR S&P 500 ETF Trust is the top asset creator, pulling in $5.1 billion in capital. It tracks the S&P 500 Index and holds 503 stocks in its basket, with each accounting for no more than 7.4% of assets. SPDR S&P 500 ETF Trust is heavy on the information technology sector with a 26.1% share, while healthcare, financials and consumer discretionary round off the next three spots with a double-digit allocation each (read: Low-Beta ETFs to Counter Market Volatility).
SPDR S&P 500 ETF Trust charges investors 9 bps in annual fees and trades in an average daily volume of 79 million shares. It has AUM of $381.3 billion and a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Vanguard Total Stock Market ETF (VTI)
Vanguard Total Stock Market ETF gathered $1.2 billion in capital. It provides exposure to the broader stock market by tracking the CRSP US Total Market Index. Vanguard Total Stock Market ETF holds a large basket of well-diversified 3,895 stocks with key holdings in technology, consumer discretionary, healthcare, industrials and financials.
Vanguard Total Stock Market ETF charges 3 bps in fees per year from investors and trades in an average daily volume of 3 million shares. VTI has amassed $284.6 billion in its asset base and has a Zacks ETF Rank #3 with a Medium risk outlook.
iShares 20+ Year Treasury Bond ETF (TLT)
iShares 20+ Year Treasury Bond ETF has accumulated $949.5 million in its asset base. It provides exposure to long-term Treasury bonds by tracking the ICE U.S. Treasury 20+ Year Bond Index. iShares 20+ Year Treasury Bond ETF holds 35 securities in its basket and charges 15 bps in annual fees. It has an average maturity of 25.42 years and an effective duration of 17.34 years.
TLT is one of the most popular and liquid ETFs in the bond space, with AUM of $36.7 billion and an average daily volume of 22 million shares. iShares 20+ Year Treasury Bond ETF has a Zacks ETF Rank #4 (Sell) with a High risk outlook (read: Time for U.S. Treasury ETFs?).
iShares iBoxx USD High Yield Corporate Bond ETF (HYG)
iShares iBoxx $ High Yield Corporate Bond ETF has accumulated $872.4 billion in capital. It offers exposure to a broad range of U.S. high-yield corporate bonds by tracking the Markit iBoxx USD Liquid High Yield Index. iShares iBoxx $ High Yield Corporate Bond ETF holds 1,201 securities in its basket with an average maturity of 4.99 years and an effective duration of 3.74 years.
iShares iBoxx $ High Yield Corporate Bond ETF is one of the most widely used high-yield bond ETFs with AUM of $14.8 billion and an average daily volume of 40 million shares. HYG charges 48 bps in annual fees and has a Zacks ETF Rank #4 with a High risk outlook.
iShares Core U.S. Aggregate Bond ETF (AGG)
iShares Core U.S. Aggregate Bond ETF saw an inflow of $616 million. It offers broad exposure to U.S. investment-grade bonds by tracking the Bloomberg US Aggregate Bond Index. iShares Core U.S. Aggregate Bond ETF holds 10,926 securities in its basket with an average maturity of 8.61 years and an effective duration of 6.26 years.
iShares Core U.S. Aggregate Bond ETF has AUM of $90.5 billion and an average daily volume of 6 million shares. It charges 3 bps in annual fees.
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