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5 Hot ETFs of November to Continue Gaining Investor's Love

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The global stock market wrapped up its best month ever with the MSCI World Index, which tracks around 1,603 stocks in 23 developed countries, gaining about 13% in November. With the stock market hitting new highs, the ETF is not behind with inflows breaking records.

Overall, ETFs gathered about $91.2 billion in November per eftf.com, blowing past the previous highs reached in January 2018 with $68.1 billion inflows and in June 2019 with $63.8 billion. Though international stocks outperformed last month, investors flocked to U.S. equities in droves. This is especially true as U.S. equities pulled in about $62 billion of new money in November, followed by inflows of $20.2 billion for international equity ETFs and $11.3 billion for U.S. fixed income ETFs, per etf.com.

U.S. Equity ETFs: A Hot Spot

Despite the surge in coronavirus cases, the month of November has been a historic one for the U.S. stock market with the major indices posting their biggest gains ever. Notably, the Dow Jones Industrial Average logged its best month since January 1987, jumping about 12%. The blue chip index topped the 30,000 milestone for the first time. Meanwhile, the S&P 500 and the Nasdaq Composite Index enjoyed their best month since April. The small-cap Russell 2000 also surged 18.2%, marking its best monthly performance ever (read: 7 Leveraged ETFs of November With Spectacular Returnss).

The rally primarily came on a vaccine development and the prospect of a divided government. This is because a vaccine is being viewed as “a beginning to the end” of the coronavirus pandemic, and the divided congress is considered favorable for the economy with lesser chances of major tax increases and tighter regulations. The prospect for a smooth transition of Biden to the White House has been improving, thereby bolstering confidence in the market. Further, better-than-expected earnings propelled stocks higher.

Given this, we have highlighted five ETFs that enjoyed huge capital inflows last month and are expected to do so should the similar trends prevail.

SPDR S&P 500 ETF Trust (SPY - Free Report)

SPY was the most popular ETF plays last month, pulling in about $13.9 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket with each accounting for not more than 6.5%. The fund is widely spread across sectors with information technology, healthcare, consumer discretionary and communication services being the top four, with double-digit allocation each. It has AUM of $324.2 billion and charges 9 bps in fees per year from investors. The product trades in heavy volume of around 63.8 million shares a day on average and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

Vanguard Total Stock Market ETF (VTI - Free Report)

This fund has gathered $5.3 billion in capital, bringing its total AUM to $188.9 billion. It provides exposure to the broad stock market by tracking the CRSP US Total Market Index. The ETF holds a large basket of well-diversified 3590 stocks with key holdings in technology, consumer discretionary, healthcare, industrials and financials. It charges 3 bps in fees per year from investors and trades in average daily volume 3.3 million shares. VTI has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

iShares Edge MSCI USA Quality Factor ETF (QUAL - Free Report)

With AUM of $21.5 billion, QUAL offers exposure to large and mid-cap stocks exhibiting positive fundamentals (high return on equity, stable year-over-year earnings growth and low financial leverage) by tracking the MSCI USA Sector Neutral Quality Index. It holds 125 securities in its basket with none accounting for more than 4.2% of assets. The fund is slightly tilted toward technology at 28.2% allocation while health care, consumer discretionary and communications round off the next three spots with double-digit exposure each. It saw inflows of $3.2 billion last month and trades in average daily volume of 834,000 shares. The ETF charges 15 bps in annual fees (read: Bet on Quality ETFs as Vaccine Hope & Coronavirus Cases Rise).

iShares Russell 2000 ETF (IWM - Free Report)

IWM is the largest and the most-popular ETFs in the small-cap space with AUM of $51.1 billion and average daily volume of 23.4 million shares. It tracks the Russell 2000 Index and has accumulated $2.7 million in capital last month. Holding well-diversified 2,014 stocks in its basket, the fund has key holdings in healthcare, financials, industrials, information technology and consumer discretionary. It charges 19 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook (read: Small Cap ETFs Deliver Big Gains for Investors).

Vanguard S&P 500 ETF (VOO - Free Report)

This fund has gathered $2.5 million in its asset base, propelling its AUM to $177.6 billion. Like SPY, it also tracks the S&P 500 Index and holds 508 stocks in its basket. The ETF charges investors 3 bps in annual fees and trades in average daily volume of 2.8 million shares. VOO has a Zacks ETF Rank #2 with a Medium risk outlook.

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