Dec 10-16 was a bumper week for the broad market ETFs with a net inflow of $78.2 billion. This brings inflows of $895.4 billion year to date. About half of the inflows came on Dec 16 following the Fed’s decision and volatility arising from the Omicron COVID-19 variant. U.S. equity ETFs remained the major money puller with $66.7 billion, closely followed by $9.9 billion in international equity ETFs and $133.4 million in U.S. fixed-income ETFs, per etf.com.
SPDR S&P 500 ETF Trust SPY, Vanguard Total Stock Market ETF VTI, Vanguard Mid-Cap ETF VO, iShares S&P 500 Growth ETF IVW and Invesco QQQ Trust QQQ dominated the top asset-creation list last week.
Stock Market Synopsys
Wall Street saw a tumultuous week with the major bourses in red. The tech-heavy Nasdaq Composite Index underperformed, declining 2.9% while the S&P 500 Index and the blue-chip Dow Jones Index dropped 1.9 and 1.7%, respectively (read: Forget Omicron: Tap S&P 500 ETFs for At Least 6% Gains in 2022).
The decline came on the back of a rapid surge in the Omicron COVID-19 cases. A study warned that the rapidly spreading Omicron was five times more likely to reinfect people than its predecessor, Delta. Additionally, European countries geared up for further travel and social restrictions. The losses were also backed by year-end tax selling and the simultaneous expiration of stock options, stock index futures and index options contracts (known as triple witching).
Further, the Fed’s more aggressive unwinding of its pandemic-era monthly bond buying led to a selloff in growth stocks, especially technology. The central bank plans to buy $60 billion per month of bonds in combined Treasuries and agency mortgage-backed securities starting in January, down from $90 billion in December and 120 billion from the start of the pandemic through November.
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 $9.1 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket, with each accounting for no more than 7% of assets. SPDR S&P 500 ETF Trust is heavy on the information technology sector, while healthcare, consumer discretionary, 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 62.3 million shares. It has AUM of $440.1 billion and a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Vanguard Total Stock Market ETF (VTI)
Vanguard Total Stock Market ETF has gathered $1.1 billion in capital, taking its total AUM to $297 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 4,156 stocks with key holdings in technology, consumer discretionary, industrials, healthcare and financials.
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 (read: 5 Hot ETFs of 2021 Driving Global Inflows to Record $1T).
Vanguard Mid-Cap ETF (VO)
Vanguard Mid-Cap ETF pulled in $3.2 billion in capital last week. It targets the mid-cap segment of the broad stock market and tracks the CRSP US Mid Cap Index. Vanguard Mid-Cap ETF holds 383 stocks with a well-diversified portfolio as each firm holds no more than 1% of the total assets. The fund has key holdings in technology, industrials, consumer discretionary, financials and healthcare.
With AUM of $59.2 billion, the fund charges investors 4 bps in fees per year and trades in an average daily volume of 739,000 shares. Vanguard Mid-Cap ETF has a Zacks ETF Rank #2 with a Medium risk outlook.
iShares S&P 500 Growth ETF (IVW)
iShares S&P 500 Growth ETF accumulated $3.1 billion last week. It tracks the S&P 500 Growth Index and holds 242 stocks in its basket. iShares S&P 500 Growth ETF is heavily concentrated on the top two firms with double-digit exposure each. Additionally, iShares S&P 500 Growth ETF is skewed toward information technology at 43.4%, while consumer discretionary, communication and health care round off the next three spots with double-digit exposure each (read: 5 ETF Bets for Those Undeterred by the Omicron Threat).
iShares S&P 500 Growth ETF charges 18 bps in annual fees and has amassed $43.3 billion in its asset base. The fund trades in an average daily volume of 1.7 million shares and has a Zacks ETF Rank #2 with a Medium risk outlook.
Invesco QQQ Trust (QQQ)
Invesco QQQ gathered about $3 billion in its asset base last week. QQQ provides exposure to the 101 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 7.1% of assets. The product is also heavily tilted toward information technology at 50.6% 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 $212.2 billion and an average daily volume of 43.4 million shares. QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
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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 S&P 500 Growth ETF (IVW): ETF Research Reports
Vanguard MidCap ETF (VO): ETF Research Reports
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Zacks Investment Research
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