ETFs across various categories pulled in $49.4 billion in capital last week, pushing the year-to-date inflows to $406.3 billion. U.S. equity ETFs led the way with $34.8 billion in inflows, followed by inflows of $9.3 billion in U.S. fixed-income ETFs and $2.4 billion in leveraged ETFs.
SPDR S&P 500 ETF Trust SPY, iShares Russell 2000 ETF IWM, Vanguard S&P 500 ETF VOO, Direxion Daily Semiconductor Bull 3x Shares SOXL and iShares Broad USD High Yield Corporate Bond ETF USHY dominated the top creation list last week.
Wall Street witnessed a mixed performance last week, with the S&P 500 logging its worst week since April, shedding 2%. The tech-heavy Nasdaq fell 3.6%, snapping a six-week winning streak, while Dow Jones Index gained for a third straight week, rising 0.7%. The small cap-focused Russell 2000 Index climbed 1.7% (read: Dow Reclaims 40,000 Mark, Surpasses Major Indices: ETFs to Tap).
The divergence in the performance came as investors shunned major tech stocks, the main winners of this year, in favor of the areas of the market that are the bigger beneficiaries of Fed rate cuts, like small caps. This is especially true as the probability of Trump winning the election in November has surged, leading to worries over the possibility of tighter U.S. restrictions on exports of semiconductor technology to China.
Additionally, the bets that the Fed will cut interest rates in September ramped up, resulting in a spike in small-cap stocks. The pint-sized companies have a higher level of debt and lower rates generally lead to reduced borrowing costs. This helps small businesses expand their operations more easily and increases profitability, in turn stimulating economic growth. As small-cap companies are more domestically tied, these are poised to outperform when the economy improves.
We have detailed the ETFs below:
SPDR S&P 500 ETF Trust (SPY)
SPDR S&P 500 ETF Trust topped the asset flow creation last week, gathering $9.9 billion in capital. It tracks the S&P 500 Index and holds 503 stocks in its basket, with each accounting for no more than 7.1% of the assets. SPDR S&P 500 ETF Trust is heavy on the information technology sector with a 31.9% share, while financials, healthcare and consumer discretionary round off the next three 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 38 million shares. It has an AUM of $561.6 billion and a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
iShares Russell 2000 ETF (IWM)
iShares Russell 2000 ETF has accumulated $4 billion in its asset base. It is the largest and most popular ETF in the small-cap space, with an AUM of $70 billion and an average daily volume of 25 million shares. iShares Russell 2000 ETF holds well-diversified 1,987 stocks in its basket and has key holdings in financials, healthcare, industrials and information technology.
iShares Russell 2000 ETF charges 19 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook (read: 5 Small-Cap ETFs at the Forefront of the Latest Rally).
Invesco QQQ Trust (QQQ)
Invesco QQQ Trust pulled in $3.9 billion in capital. It provides exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Invesco QQQ has a modest concentration on the top firms.
Invesco QQQ is one of the largest and most popular ETFs in the large-cap space, with an AUM of $292.7 billion and an average daily volume of 27 million shares. QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
Direxion Daily Semiconductor Bull 3x Shares (SOXL)
Direxion Daily Semiconductor Bull 3x Shares has gathered $1.2 billion in its asset base, propelling its AUM to $11 billion. It targets the semiconductor corner of the technology sector with three times leveraged exposure to the NYSE Semiconductor Index. Direxion Daily Semiconductor Bull 3x Shares charges 72 bps in fees per year and trades in an average daily volume of 44.6 million shares (read: Beyond AI, Semiconductor ETFs Have Another Reason to Rally).
iShares Broad USD High Yield Corporate Bond ETF (USHY)
iShares Broad USD High Yield Corporate Bond ETF accumulated $1.2 billion in capital. It targets the U.S. dollar-denominated, high-yield corporate bonds and follows the ICE BofA US High Yield Master II Constrained Index HUC0. iShares Broad USD High Yield Corporate Bond ETF holds 1,864 bonds in its basket with an average maturity of 4.31 years and an effective duration of 3.21 years.
iShares Broad USD High Yield Corporate Bond ETF trades in an average daily volume of 6 million shares and charges 8 bps in annual fees.
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SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Russell 2000 ETF (IWM): ETF Research Reports
Vanguard S&P 500 ETF (VOO): ETF Research Reports
Direxion Daily Semiconductor Bull 3X Shares (SOXL): ETF Research Reports
iShares Broad USD High Yield Corporate Bond ETF (USHY): ETF Research Reports
Read More: 5 ETFs That Gained Investors’ Love Last Week