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Most Loved/Hated ETFs of the Fourth Quarter

Sanghamitra Saha

Wall Street saw a stellar fourth-quarter, with SPDR S&P 500 ETF Trust SPY adding 9.5%, SPDR Dow Jones Industrial Average ETF Trust DIA rising 7.2%and Invesco QQQ Trust QQQ gaining about 13.3%.

Hopes of the phase-one trade deal, decent earnings, global easy money policies and holiday shopping spree regulated the ETF world in the fourth quarter. Against this backdrop, let’s see which ETFs raked in solid assets and the ones that lost.

U.S. Equities Win

The S&P 500 ETF SPDR S&P 500 ETF Trust (SPY) garnered about $8.35 billion in assets in the fourth quarter as the index topped the 3,200 mark. The Santa Rally has taken control of Wall Street fully this year.  Though still not out of woods, the U.S. economy is showing signs of improvement. The so-called “inverted yield curve,” which gives signals of an impending recession, reverted back to normal in the fourth quarter.

Trade tensions have eased a lot with the announcement of phase-one U.S.-China and USMCA trade deals. With this, investors’ confidence in the global economy has returned (read: S&P 500 Tops 3, 200: What Lies Ahead for ETFs in 2020?).

The Nasdaq Composite too crossed the 9,000-mark, benefiting QQQ,which has amassed about $2.75 billion in assets. Vanguard Total Stock Market ETF VTI has hauled in about $5.19 billion in assets during this phase.

Bonds Prevail

iShares Core U.S. Aggregate Bond ETF AGG and Vanguard Total Bond Market ETF BND have added about $3.43 billion and $3.25 billion in assets. A dovish Fed, ECB, BoJ and several emerging economies kept global interest rates subdued and made these bond ETFs attractive to investors.

Global ETFs Are Hot

International ETFs like iShares Core MSCI EAFE ETF IEFA and Vanguard Total International Stock ETF VXUS have been dear to investors on receding global growth worries.IEFA and VXUS attracted about $4.29 billion and $2.35 billion in the fourth quarter.

Quality & Dividend Rule

Despite positive developments from the Fed and trade concerns prevailed in the market. Investors should note that despite easy money policies by the Fed this year, economic data points were mixed. As a result, investors sought safety in quality and dividend ETFs. iShares Edge MSCI U.S.A. Quality Factor ETF QUAL garnered about $3.18 billion in assets while Vanguard High Dividend Yield ETF VYM amassed about $2.54 billion.

Lure for Emerging Markets Returns

Trade tensions dealt a blow to the emerging market bloc. iShares Core MSCI Emerging Markets ETF IEMG which lost assets in the third quarter, started receiving investors’ attention. The fund gained about $2.48 billion in assets in Q4 (read: Top ETF Areas for 2020).

Gold Loses Its Sheen

As the broader market rallied, investors dumped this safe-haven metal.SPDR Gold Trust GLD lost about $1.27 billion in assets (read: Gold to Shine in 2020: ETFs to Consider).

Low-Volatility ETFs Out of Favor

This is another loser of the soaring stock market. Invesco S&P 500 Low Volatility ETF SPLV, which gives exposure to low-volatility stock and relatively defensive in nature, saw about $879 million of assets gushing out.

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SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports
 
Invesco S&P 500 Low Volatility ETF (SPLV): ETF Research Reports
 
Vanguard Total Stock Market ETF (VTI): ETF Research Reports
 
Vanguard Total Bond Market ETF (BND): ETF Research Reports
 
Vanguard High Dividend Yield ETF (VYM): ETF Research Reports
 
iShares Core U.S. Aggregate Bond ETF (AGG): ETF Research Reports
 
SPDR Gold Shares (GLD): ETF Research Reports
 
Vanguard Total International Stock ETF (VXUS): ETF Research Reports
 
Invesco QQQ (QQQ): ETF Research Reports
 
iShares Core MSCI Emerging Markets ETF (IEMG): ETF Research Reports
 
iShares Core MSCI EAFE ETF (IEFA): ETF Research Reports
 
iShares Edge MSCI USA Quality Factor ETF (QUAL): ETF Research Reports
 
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Zacks Investment Research
 
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