The broad market rout last week made equity ETFs attractive as investors jumped to buy on the dip. This is especially true as ETFs overall gathered about $19.8 billion capital last week (ending Nov 26-Dec 2), bringing inflows of $799.3 billion year to date. U.S. equity ETFs led the way higher last week with $14 billion inflows, closely followed by $2.5 billion in international equity ETFs and $1.9 billion in U.S. fixed-income ETFs, per etf.com.
SPDR S&P 500 ETF Trust SPY, Invesco QQQ Trust QQQ, iShares 20+ Year Treasury Bond ETF TLT, iShares Core S&P 500 ETF IVV and Vanguard Total Stock Market ETF VTI dominated the top creation list last week.
Stock Market Synopsys
Wall Street saw a wild swing last week on growth concerns and Fed’s speedy taper talks. The Nasdaq Composite Index underperformed, shedding 2.6% while the S&P 500 and Dow Jones industrial Average lost 1.2% and 0.9%, respectively.
The spread of the new COVID-19 variant, Omicron, has sparked fears of restriction measures and another wave of lockdown. This will likely dampen economic growth, which is recovering from the pandemic lows. Meanwhile, Federal Reserve Chair Jerome Powell signaled that the central bank is planning to accelerate the withdrawal of its bond-buying program at its December meeting to combat a surge in inflation (read: Low-Beta ETFs to Fend Off Market Volatility).
A disappointing November jobs report added to the worries. The U.S. added just 210,000 jobs last month compared to 573,000 jobs predicted by economists polled by Dow Jones. This represents the smallest number of jobs added to the U.S. economy since December 2020, when the economy actually shed jobs amid a surge in COVID cases.
We have detailed the ETFs below:
SPDR S&P 500 ETF Trust (SPY)
SPDR S&P 500 ETF Trust topped asset flow creation last week, gathering $4.1 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket, with each accounting for no more than 6.6% of assets. SPDR S&P 500 ETF Trust is heavy on the information technology sector while consumer discretionary, healthcare, financials and communication services round off the next four spots with a double-digit allocation each.
SPDR S&P 500 ETF Trust charges investors 9 bps in annual fees and trades in an average daily volume of 62.1 million shares. It has AUM of $409.8 billion and a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: S&P 500 Notches Best Day in Seven Weeks: 5 ETF Winners).
Invesco QQQ Trust (QQQ)
Invesco QQQ gathered more than $2.5 billion in its asset base last week. QQQ provides exposure to the 103 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Invesco QQQ is heavily concentrated on the top two firms with a double-digit allocation while its other firms hold no more than 7.6% of assets. The product is also heavily tilted toward information technology at 50.8% while communication services and consumer discretionary round off the next two spots.
Invesco QQQ is one of the largest and most-popular ETFs in the large-cap space with AUM of $208.7 billion and an average daily volume of 40.9 million shares. QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
iShares 20+ Year Treasury Bond ETF (TLT)
iShares 20+ Year Treasury Bond ETF accumulated $2 million last week, taking its total AUM to $18.2 billion. It is the most popular and liquid ETF in the long-dated bond space with an average daily volume of 15.9 million shares.
iShares 20+ Year Treasury Bond ETF tracks the ICE U.S. Treasury 20+ Year Bond Index, holding 36 securities in its basket. The fund has an average maturity of 26.10 years and an effective duration of 19.45 years. iShares 20+ Year Treasury Bond ETF charges 15 bps in fees per year.
iShares Core S&P 500 ETF (IVV)
iShares Core S&P 500 ETF has pulled in $1.9 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket, with each accounting for no more than 6.6% of assets. IVV is heavy on the information technology sector while consumer discretionary, healthcare, financials and communication services round off its next four spots with a double-digit allocation each.
iShares Core S&P 500 ETF charges investors 3 bps in annual fees and trades in an average daily volume of 4 million shares. It has AUM of $315.6 billion and a Zacks ETF Rank #2 with a Medium risk outlook.
Vanguard Total Stock Market ETF (VTI)
Vanguard Total Stock Market ETF has gathered $1.6 billion in capital, taking its total AUM to $284.7 billion. 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 4,124 stocks with key holdings in technology, consumer discretionary, industrials, healthcare and financials (read: ETF Asset Report of November: S&P 500 Wins).
Vanguard Total Stock Market ETF charges 3 bps in fees per year from investors and trades in an average daily volume 3.4 million shares. VTI has a Zacks ETF Rank #2 with a Medium risk outlook.
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iShares 20 Year Treasury Bond ETF (TLT): ETF Research Reports
Invesco QQQ (QQQ): ETF Research Reports
SPDR S&P 500 ETF (SPY): ETF Research Reports
Vanguard Total Stock Market ETF (VTI): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
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Zacks Investment Research
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