Overall, ETFs pulled out $6.7 billion in capital last week, taking year-to-date inflows down to $321.7 billion. U.S. equity ETFs led the way with $8.1 billion in outflows. Meanwhile, U.S. fixed-income ETFs saw strong inflows of $1.1 billion and U.S. international ETFs gathered $200 million in their asset base, per etf.com.
SPDR S&P 500 ETF Trust SPY, iShares Russell 2000 ETF IWM, Invesco Senior Loan ETF BKLN, Invesco S&P 500 Equal Weight ETF RSP and Vanguard Total Bond Market ETF BND dominated the top creation list last week.
Wall Street ended the week on a downbeat note. The S&P 500 and the Nasdaq Composite Index notched their worst week since March, declining 2.9% and 3.6%, respectively, while the Dow Jones fell 1.9%.
Most of the decline was due to the anticipation of higher rates for a longer time. The Fed warned of one more rate hike this year if it needed to control inflation and curtailed expectations for rate cuts in 2024. The news has pushed up yields, leading to a sell-off in the stock market. With bonds offering better interest, investors are less willing to pay high prices for stocks, especially the higher-priced ones or those with anticipated long-term growth. Notably, 10-year yields surged to 4.44% and 2-year yields reached 5.10% last week (read: Bet on Quality ETFs as Fed Keeps Rate Steady, View Hawkish).
Additionally, the government shutdown situation built up late last week after House Republican leaders sent the chamber into recess. A shutdown would hurt fourth-quarter GDP.
We have detailed the ETFs below:
SPDR S&P 500 ETF Trust (SPY)
SPDR S&P 500 ETF Trust is the top asset creator, pulling in $3.9 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 27.3% share, while healthcare, financials 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 64 million shares. It has AUM of $404.4 billion and a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
iShares Russell 2000 ETF (IWM)
iShares Russell 2000 ETF has accumulated $1.2 billion in its asset base. It is the largest and most popular ETF in the small-cap space, with AUM of $50.7 billion and an average daily volume of 23 million shares. iShares Russell 2000 ETF holds well-diversified 1,991 stocks in its basket and has key holdings in industrials, financials, healthcare, information technology and consumer discretionary.
iShares Russell 2000 ETF charges 19 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
Invesco Senior Loan ETF (BKLN)
Invesco Senior Loan ETF saw an inflow of $615.3 million last week. It follows the Morningstar LSTA US Leveraged Loan 100 Index, which is designed to track the market-weighted performance of the largest institutional leveraged loans based on market weightings, spreads and interest payments. It holds 132 securities in its basket with an average maturity of 4.35 years (read: An Introduction to Senior Loan ETFs).
Invesco Senior Loan ETF has amassed $5 billion in AUM and charges 65 bps in annual fees. It trades in an average daily volume of 6 million shares.
Invesco S&P 500 Equal Weight ETF (RSP)
Invesco S&P 500 Equal Weight ETF has gathered $435.8 million in capital. It tracks the S&P 500 Equal Weight Index, which equally weights the stocks in the S&P 500 Index. It holds 504 stocks in its basket and charges 20 bps in annual fees (read: QQQ vs. RSP: Which Is the Better ETF Investment Now?).
Invesco S&P 500 Equal Weight ETF has amassed $40.8 billion in its asset base and trades in an average daily volume of 4.3 million shares and has a Zacks Rank #3.
Vanguard Total Bond Market ETF (BND)
Vanguard Total Bond Market ETF has accumulated $409.3 million in its asset base last week. It targets the broad U.S. investment grade bond market by tracking the Bloomberg Barclays U.S. Aggregate Float Adjusted Index. The product holds 10,646 securities in its basket with an average maturity and effective duration of 8.8 years and 6.4 years, respectively.
Vanguard Total Bond Market ETF is the largest bond ETF with AUM of $94 billion and an average daily volume of 5.3 million shares. It charges 3 bps in annual fees.
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