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Wall Street was upbeat in October, with the S&P 500 adding 7.9%, the Dow Jones gaining as much as 14%, the Nasdaq adding 1.6% and the Russell 2000 jumping 8.1%. The Dow Jones Industrial Average has just logged its best month since 1976 in October.
Focus on value stocks, favorable sectoral exposure, oil rally and cheaper valuation helped the Dow Jones to attain this height. Speculation that the Fed may slow down the rate hike momentum from December and decent corporate earnings probably led to the return of risk-on sentiments.
Against this backdrop, below we highlight the asset report of October.
S&P 500 & Total Stock Market Top
The S&P 500 has amassed huge assets in October. Still, SPDR S&P 500 ETF Trust (SPY - Free Report) , iShares Core S&P 500 ETF (IVV - Free Report) and Vanguard S&P 500 ETF (VOO) added about $13.9 billion, $4.40 billion and $3.49 billion in assets in the month, respectively. Vanguard Total Stock Market ETF (VTI - Free Report) has hauled in about $3.10 billion in assets. Cheaper valuation probably has lured investors to focus on the S&P 500 ETFs as risk-on sentiments returned in the market.
Investment Grade Corporate Bond & Junk Bond ETFs Win
iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD - Free Report) hauled in about $3.66 billion while SPDR Bloomberg High Yield Bond ETF (JNK - Free Report) has fetched about $3.14 billion in assets. As risk-on sentiments returned in the market, investors started betting big on corporate bond ETFs, both investment-grade as well as junk bonds.
Floating-Rate Bond ETFs Gain Assets
WisdomTree Floating Rate Treasury Fund (USFR - Free Report) attracted about $2.30 billion in October. Floating rate bonds are investment grade and do not pay a fixed rate to investors but have variable coupon rates that are often tied to an underlying index (such as LIBOR) plus a variable spread depending on the credit risk of the issuers.
Since the coupons of these bonds are adjusted periodically, these are less sensitive to an increase in rates compared to the traditional bonds. Unlike fixed coupon bonds, these do not lose value when the rates go up, making the bonds ideal for protecting investors against capital erosion in a rising rate environment.
Tax-Exempt Bonds too in Favor
Vanguard Tax-Exempt Bond ETF (VTEB - Free Report) has amassed about $3.44 billion in assets in October. The underlying Standard & Poors National AMT-Free Municipal Bond Index measures the performance of the investment-grade segment of the U.S. municipal bond market.
Nasdaq & ESG ETFs Fell Out of Favor
Invesco QQQ Trust (QQQ - Free Report) and iShares ESG Aware MSCI USA ETF (ESGU - Free Report) saw about $2.13 billion and $1.51 billion in assets gushing out, respectively. Both funds’ dependence on tech stocks probably led to this outflow. Tech stocks have been underperforming economically-sensitive sectors lately.
Gold Lost Its Glitter
As the greenback gained massive strength lately, gold prices underperformed. Gold is priced in the U.S. dollar. As rates have been rising in the United States and globally, non-interest-bearing assets like gold fell out of investors’ favor. The gold bullion ETFs iShares Gold Trust (IAU - Free Report) andSPDR Gold Trust (GLD - Free Report) lost about $1.1 billion and $996 million in assets.
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ETF Asset Report of October
Wall Street was upbeat in October, with the S&P 500 adding 7.9%, the Dow Jones gaining as much as 14%, the Nasdaq adding 1.6% and the Russell 2000 jumping 8.1%. The Dow Jones Industrial Average has just logged its best month since 1976 in October.
Focus on value stocks, favorable sectoral exposure, oil rally and cheaper valuation helped the Dow Jones to attain this height. Speculation that the Fed may slow down the rate hike momentum from December and decent corporate earnings probably led to the return of risk-on sentiments.
Against this backdrop, below we highlight the asset report of October.
S&P 500 & Total Stock Market Top
The S&P 500 has amassed huge assets in October. Still, SPDR S&P 500 ETF Trust (SPY - Free Report) , iShares Core S&P 500 ETF (IVV - Free Report) and Vanguard S&P 500 ETF (VOO) added about $13.9 billion, $4.40 billion and $3.49 billion in assets in the month, respectively. Vanguard Total Stock Market ETF (VTI - Free Report) has hauled in about $3.10 billion in assets. Cheaper valuation probably has lured investors to focus on the S&P 500 ETFs as risk-on sentiments returned in the market.
Investment Grade Corporate Bond & Junk Bond ETFs Win
iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD - Free Report) hauled in about $3.66 billion while SPDR Bloomberg High Yield Bond ETF (JNK - Free Report) has fetched about $3.14 billion in assets. As risk-on sentiments returned in the market, investors started betting big on corporate bond ETFs, both investment-grade as well as junk bonds.
Floating-Rate Bond ETFs Gain Assets
WisdomTree Floating Rate Treasury Fund (USFR - Free Report) attracted about $2.30 billion in October. Floating rate bonds are investment grade and do not pay a fixed rate to investors but have variable coupon rates that are often tied to an underlying index (such as LIBOR) plus a variable spread depending on the credit risk of the issuers.
Since the coupons of these bonds are adjusted periodically, these are less sensitive to an increase in rates compared to the traditional bonds. Unlike fixed coupon bonds, these do not lose value when the rates go up, making the bonds ideal for protecting investors against capital erosion in a rising rate environment.
Tax-Exempt Bonds too in Favor
Vanguard Tax-Exempt Bond ETF (VTEB - Free Report) has amassed about $3.44 billion in assets in October. The underlying Standard & Poors National AMT-Free Municipal Bond Index measures the performance of the investment-grade segment of the U.S. municipal bond market.
Nasdaq & ESG ETFs Fell Out of Favor
Invesco QQQ Trust (QQQ - Free Report) and iShares ESG Aware MSCI USA ETF (ESGU - Free Report) saw about $2.13 billion and $1.51 billion in assets gushing out, respectively. Both funds’ dependence on tech stocks probably led to this outflow. Tech stocks have been underperforming economically-sensitive sectors lately.
Gold Lost Its Glitter
As the greenback gained massive strength lately, gold prices underperformed. Gold is priced in the U.S. dollar. As rates have been rising in the United States and globally, non-interest-bearing assets like gold fell out of investors’ favor. The gold bullion ETFs iShares Gold Trust (IAU - Free Report) andSPDR Gold Trust (GLD - Free Report) lost about $1.1 billion and $996 million in assets.