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Loved and Hated ETF Areas of February

Sanghamitra Saha
Investors need to pay close attention to Avaya (AVYA) stock based on the movements in the options market lately.

The month of February was all about dovish Fed minutes, signs of development in the U.S.-China trade talks, oil price rally, solid momentum in marijuana investing and talks of a delayed Brexit. While these factors heated up the global equity market despite winter chills, global growth worries and geopolitical tensions kept haunting investors.  

Against this backdrop, let’s see which ETF areas investors parked money in February and which areas were shied away from (as of Feb 26) (per etf.com ):

Wall Street a Winner

February performance positioned the S&P 500 for its “best year-to-date performance in more than three decades”, per financial times. The S&P 500 recovered this year from the Christmas slump and is now about 5% away from its record high notched five months ago as indicated by financial times. So, no wonder SPDR S&P 500 ETF Trust SPY and iShares Core S&P Total U.S. Stock Market ETF ITOT hauled in about $4.0 billion and $1.09 billion in assets in the month, respectively (read: How to Go Long On the S&P 500 With ETFs).

Bond ETFs Held Heads High

Growth worries are likely to keep global central banks accommodative in the near term, which in turn should keep bond yields at check and give a boost to the price. Probably this is why, Vanguard Total International Bond ETF BNDX, iShares iBoxx USD High Yield Corporate Bond ETF HYG and iShares 7-10 Year Treasury Bond ETF IEF have amassed about $2.47 billion, $1.76 billion and $1.68 billion in assets, respectively (read: Vanguard Intensifies ETF Fee War Again).

Emerging Markets Stay Strong

Since the greenback remained subdued in February on dovish Fed minutes, scope for emerging market investments brightened. Plus, signs of improvement in the U.S.-China trade relation gave a boost to the segment. In fact, Trump administration delayed the increase in tariffs to 25% on about $200 billion worth of Chinese goods, citing “substantial progress” in trade talks with Beijing.

Vanguard FTSE Emerging Markets ETF VWO pulled in about $1.61 billion in assets in the month. iShares JP Morgan USD Emerging Markets Bond ETF EMB also raked in around $1.23 billion in assets (read: EM Equities ETFs Off to a Great Start in 2019: Here's Why).

Low Volatility ETFs Prevail

Since global growth worries remained alive and kicking even amid strong market conditions, iShares Edge MSCI Min Vol U.S.A. ETF USMV amassed about $1.40 billion in assets in February.

Short-term Bond ETFs See Solid Redemption

iShares Short Treasury Bond ETF SHV and Vanguard Short-Term Bond ETF BSV are the top losers of assets in the month. Both saw about $2.18 billion and $1.70 billion in asset loss. iShares 1-3 Year Treasury Bond ETF SHY lost about $1.1 billion worth of assets in the month. Since rate worries took a backseat, investors seem less interested in investing in short-duration bond ETFs. The yield is also paltry in the above-mentioned products, making them unappealing bets.

International Stocks Fall Out of Favor

The U.S. economy appears to be the lone star in the developed market pack as growth is dwindling in other key economies. iShares MSCI EAFE ETF EFA and Vanguard Total World Stock ETF VT shed about $1.33 billion and $1.04 billion in assets.

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iShares 1-3 Year Treasury Bond ETF (SHY): ETF Research Reports
 
iShares Core S&P Total U.S. Stock Market ETF (ITOT): ETF Research Reports
 
iShares iBoxx $ High Yield Corporate Bond ETF (HYG): ETF Research Reports
 
iShares 7-10 Year Treasury Bond ETF (IEF): ETF Research Reports
 
Vanguard FTSE Emerging Markets ETF (VWO): ETF Research Reports
 
iShares Edge MSCI Min Vol USA ETF (USMV): ETF Research Reports
 
iShares Short Treasury Bond ETF (SHV): ETF Research Reports
 
iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB): ETF Research Reports
 
iShares MSCI EAFE ETF (EFA): ETF Research Reports
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
Vanguard Total World Stock ETF (VT): ETF Research Reports
 
Vanguard Total International Bond ETF (BNDX): ETF Research Reports
 
Vanguard Short-Term Bond ETF (BSV): ETF Research Reports
 
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