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ETF Asset Report of Third-Quarter 2022

The third quarter was quite a volatile one. Stocks in the United States and Europe had their biggest monthly increase since November 2020 in July but started falling in late August on renewed rising rate worries and recessionary fears. September, too, lived up to its ill-repute.

Overall, the S&P 500, the Dow Jones and the Nasdaq Composite have lost about 6.3%, 7.6% and 5%, respectively, in the past three months (as of Sep 30, 2022). The small-cap index Russell 2000 has lost 3.7%.

Against this backdrop, below, we highlight the ETF asset report for the third quarter (as of Sep 27, 2022).

S&P 500 & Total Stock Market Top

The S&P 500 has fallen into a bear market in the quarter. Still, Vanguard S&P 500 ETF VOO and iShares Core S&P 500 ETF IVV added about $10.5 billion and $4.48 billion in assets in the month, respectively. Vanguard Total Stock Market ETF (VTI) has hauled in about $5.89 billion in assets. Cheaper valuation probably has lured investors to focus on the S&P 500 ETFs.

U.S. Treasury Bonds Win

iShares U.S. Treasury Bond ETF GOVT, iShares 20+ Year Treasury Bond ETF TLT and iShares 7-10 Year Treasury Bond ETF IEF amassed about $5.74 billion, $6.90 billion and $3.59 billion in assets in Q3. Benchmark U.S. treasury bond yields started the quarter at 2.88%. The yield stood at 3.97% on Sep 27. This happened due to steep Fed rate hikes. Vanguard Total Bond Market ETF BND, which yields 2.65% annually, has amassed about $3.58 billion in assets.

High-Dividend Products in Huge Demand

The rise in interest rates is now common globally as central banks are intending to contain inflation. Hence, investors may be interested in products that have the potential to offer capital appreciation as well as benchmark-beating yields. Even if the stock or the fund falls, higher current income would go a long way in protecting investors’ total returns.

Schwab U.S. Dividend Equity ETF (SCHD) (yields about 3.68% annually) fetched about $3.45 billion in Q3. High dividend is a great attraction for investors in the current edgy market. JPMorgan Equity Premium Income ETF JEPI, which yields as high as 10.85% annually, fetched about $3.33 billion in assets.

Gold Loses Its Glitter

SPDR Gold Trust GLD andiShares Gold Trust IAU lost about $5.92 billion and $1.29 billion in assets, respectively. As gold is priced in the greenback and the U.S. dollar is rising fast, non-interest-bearing assets like gold’s demand fell.

Small Caps Fall Out of Favor

iShares Russell 2000 ETF IWM and iShares S&P Small-Cap 600 Value ETF IJS witnessedabout $2.77 billion and $1.96 billion in assets gushing out of the funds, respectively. As recessionary fears took the U.S. economy in its grip, small caps (that depends highly on the domestic economy’s wellbeing) probably fell out of investors’ favor.

Emerging Markets Underperform Too

iShares MSCI Emerging Markets ETF EEM lost about $1.87 billion in assets in Q3. Emerging markets normally underperform amid rising greenback and U.S. interest rates. Fed rates are seen at 4.6% by March, which would push up borrowing costs of emerging markets. Debt service for poor nations is expected to rise to a decade high in 2024, per Reuters. Plus, China’s COVID lockdown issues crippled the demand for EEM in Q3.


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iShares 20 Year Treasury Bond ETF (TLT): ETF Research Reports
 
SPDR Gold Shares (GLD): ETF Research Reports
 
iShares Gold Trust (IAU): ETF Research Reports
 
iShares MSCI Emerging Markets ETF (EEM): ETF Research Reports
 
iShares Russell 2000 ETF (IWM): ETF Research Reports
 
iShares 710 Year Treasury Bond ETF (IEF): ETF Research Reports
 
Vanguard S&P 500 ETF (VOO): ETF Research Reports
 
Vanguard Total Bond Market ETF (BND): ETF Research Reports
 
iShares Core S&P 500 ETF (IVV): ETF Research Reports
 
iShares U.S. Treasury Bond ETF (GOVT): ETF Research Reports
 
iShares S&P SmallCap 600 Value ETF (IJS): ETF Research Reports
 
JPMorgan Equity Premium Income ETF (JEPI): ETF Research Reports
 
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