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September ETF Asset Report: Equities Hot Favorite

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Sanghamitra Saha
·3 min read
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September may underperform on bourses but investors’ interest in equities appeared strong.  The S&P 500 witnessed its first monthly loss since March. Overall, the S&P 500, the Nasdaq and the Dow Jones were down about 4.1%, 4.5% and 3%, respectively, in September. All three indexes recorded their worst September since 2011.

Two factors started to bother Wall Street in September. One was overvaluation in tech stocks (which resulted in profit booking) and the other was the likelihood of a delayed rollout of a coronavirus vaccine. The tech-heavy Nasdaq — the real coronavirus winner — got more punished than the other indexes in early September. Notably, big tech names ballooned this year on growing demand for digitization amid social distancing.

Plus, rising COVID-19 cases in the United States and Europe, talks of major banks engaging in transferring illicit funds, and pre-election volatility in the United States spelt trouble for the markets.

Global & U.S. Stocks in Sweet Spot

There were risk-on sentiments globally in the month of September. Invesco QQQ Trust (QQQ) added about $5.25 billion in assets in the month. iShares Core S&P 500 ETF IVV, Vanguard Total Stock Market ETF (VTI), Vanguard S&P 500 ETF (VOO) and Vanguard Total International Stock ETF (VXUS) attracted about $3.84 billion, $3.43 billion, $2.53 billion and $2.26 billion, respectively, in assets in September.

Total Bond Market Stood Out

In a volatile environment, investors started pouring money in the total bond market ETFs. Vanguard Total Bond Market ETF BND and iShares Core U.S. Aggregate Bond ETF AGG fetched about $1.96 billion and $1.20 billion, respectively.

Corporate Bond ETFs Fell Out of Favor

After stellar asset creation in August, corporate bond ETFs fell out of investors’ favor. iShares iBoxx USD High Yield Corporate Bond ETF HYG, SPDR Bloomberg Barclays High Yield Bond ETF(JNK), iShares iBoxx USD Investment Grade Corporate Bond ETF(LQD) lost about $4.71 billion, $1.00 billion and $770.5 million in assets, respectively.

Gold Gaining Ground Back

As September turned volatile, SPDR Gold Trust GLD hauled in about $1.12 billion in assets in the month. Gold prices are priced in the U.S. dollar and hence a weaker dollar was beneficial for gold investment.

Small-Caps Lose Luster

As coronavirus cases rose in the United States, small-cap ETF iShares Russell 2000 ETF IWM lost about $836.6 million in the month with uncertainty regarding economic recovery taking center stage.

Technology Bleeds Asset

Technology Select Sector SPDR Fund XLK lost about $1.36 billion in assets in the month as the sector was a remarkable underperformer in the month (mainly due to profit booking).

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Technology Select Sector SPDR ETF (XLK): ETF Research Reports
 
SPDR Gold Shares (GLD): ETF Research Reports
 
Invesco QQQ (QQQ): ETF Research Reports
 
iShares iBoxx High Yield Corporate Bond ETF (HYG): ETF Research Reports
 
iShares Russell 2000 ETF (IWM): ETF Research Reports
 
iShares Core U.S. Aggregate Bond ETF (AGG): ETF Research Reports
 
iShares Core SP 500 ETF (IVV): ETF Research Reports
 
Vanguard Total Bond Market ETF (BND): ETF Research Reports
 
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