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April became the worst month of 2024 for Wall Street as the S&P 500 lost 3.4%, the Dow Jones retreated 3.4%, and the Nasdaq was off by 3.8%. Rising rate worries weighed on Wall Street in April. The U.S. economy was under pressure of high inflation and slowing growth. Meanwhile, rising geopolitical tensions gave cues of inflation remaining hot in the near term.
Notably, the Fed's preferred gauge for inflation — the "core" Personal Consumption Expenditures (PCE) index, excluding volatile food and energy sectors — rose 3.7% year over year in the first quarter. This topped estimates of 3.4% and marked a substantial increase from the 2% gain in the previous quarter.
As the Fed rhetoric was hawkish, the benchmark U.S. treasury yields started April at around 4.33%, hit a high of 4.70% and ended the month at 4.69%. Fed Chair Jerome Powell indicated last month that the central bank is in no hurry to reduce borrowing costs due to sticky inflation.
Against this backdrop, below we highlight a few ETFs that fetched sizable assets in the month of April.
ETF Asset Flows
Investors injected $31.2 billion into U.S.-listed ETFs last month, marking a decrease from the exceptionally high inflows seen in March. However, this helped to maintain the momentum to surpass last year's total inflow. The new money took year-to-date inflows to $227.6 billion, which is higher than the $146.8 billion amassed at the same time a year ago, per etf.com.
S&P 500 & Total Stock Market Top
Vanguard 500 Index Fund (VOO - Free Report) , Vanguard Total Stock Market ETF (VTI - Free Report) and Invesco S&P 500 Equal Weight ETF (RSP - Free Report) hauled in $7.7 billion, $2.62 billion and $2.23 billion in assets, respectively. However, SPDR S&P 500 ETF Trust (SPY - Free Report) witnessed outflows of $15.55 billion.
U.S. Bonds Gain Traction
iShares Core U.S. Aggregate Bond ETF (AGG - Free Report) added about $3.21 billion in assets. The underlying Bloomberg US Aggregate Bond Index measures the investment-grade, U.S.-dollar-denominated, fixed-rate taxable bond market. The fund charges 3 bps in fees and yields 3.46% annually.
Bitcoin ETF in Investors’ Favor
iShares Bitcoin Trust IBIT amassed about $1.62 billion, despite the slump in bitcoin price. The streak of 71 consecutive days of inflows into IBIT ended in April, yet it is poised to soon become the largest spot bitcoin ETF. Meanwhile, Grayscale Bitcoin Trust ETFGBTC lost assets worth of $2.52 billion.
Cash Cows Gaining Traction
In May, the Pacer U.S. Cash Cows 100 ETF (COWZ - Free Report) saw considerable inflows of $1.3 billion, reinforcing its status as one of the most successful ETFs ever. Currently, it manages $22 billion in AUM.
Leveraged Semiconductors Popular Too
Direxion Daily Semiconductor Bull 3X Shares (SOXL - Free Report) , which has lost 21% in the past month (as of May 2, 2024), attracted about $1.28 billion in assets in April. Chip demand for the AI craze is a crucial crisis right now. Several chip stocks have come up with downbeat earnings lately, dragging the whole space down.
Hence, there could be short-selling pressure in the semiconductor fund, which could be a reason for the swelling of the assets. Plus, many investors probably went for the buy-the-dip strategy.
Not only SOXL, another tech ETF Vanguard Information Technology ETF (VGT - Free Report) pulled in about $1.52 billion in assets. As tech earnings mostly came in upbeat but tech ETFs remained vulnerable due to rising rates, investors probably exercised the buy-the-dip strategy on this ultra-popular tech ETF XLK.
High-Yield Corporate Bonds Bleed
iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD - Free Report) and iShares iBoxx USD High+ Yield Corporate Bond ETF (HYG - Free Report) lost about $3.33 billion and $2.37 billion in assets, respectively, in April. Rising rate worries can be held responsible for this bloodbath. Notably, LQD and HYG yield, respectively, 4.38% and 6.00% annually.
Non-Cyclical Sectors Out of Favor
BothHealth Care Select Sector SPDR Fund (XLV - Free Report) and Consumer Staples Select Sector SPDR Fund (XLP - Free Report) saw $1.28 billion and $1.23 billion in assets gushing out of the funds.
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ETF Asset Report of April
April became the worst month of 2024 for Wall Street as the S&P 500 lost 3.4%, the Dow Jones retreated 3.4%, and the Nasdaq was off by 3.8%. Rising rate worries weighed on Wall Street in April. The U.S. economy was under pressure of high inflation and slowing growth. Meanwhile, rising geopolitical tensions gave cues of inflation remaining hot in the near term.
Notably, the Fed's preferred gauge for inflation — the "core" Personal Consumption Expenditures (PCE) index, excluding volatile food and energy sectors — rose 3.7% year over year in the first quarter. This topped estimates of 3.4% and marked a substantial increase from the 2% gain in the previous quarter.
As the Fed rhetoric was hawkish, the benchmark U.S. treasury yields started April at around 4.33%, hit a high of 4.70% and ended the month at 4.69%. Fed Chair Jerome Powell indicated last month that the central bank is in no hurry to reduce borrowing costs due to sticky inflation.
Against this backdrop, below we highlight a few ETFs that fetched sizable assets in the month of April.
ETF Asset Flows
Investors injected $31.2 billion into U.S.-listed ETFs last month, marking a decrease from the exceptionally high inflows seen in March. However, this helped to maintain the momentum to surpass last year's total inflow. The new money took year-to-date inflows to $227.6 billion, which is higher than the $146.8 billion amassed at the same time a year ago, per etf.com.
S&P 500 & Total Stock Market Top
Vanguard 500 Index Fund (VOO - Free Report) , Vanguard Total Stock Market ETF (VTI - Free Report) and Invesco S&P 500 Equal Weight ETF (RSP - Free Report) hauled in $7.7 billion, $2.62 billion and $2.23 billion in assets, respectively. However, SPDR S&P 500 ETF Trust (SPY - Free Report) witnessed outflows of $15.55 billion.
U.S. Bonds Gain Traction
iShares Core U.S. Aggregate Bond ETF (AGG - Free Report) added about $3.21 billion in assets. The underlying Bloomberg US Aggregate Bond Index measures the investment-grade, U.S.-dollar-denominated, fixed-rate taxable bond market. The fund charges 3 bps in fees and yields 3.46% annually.
Bitcoin ETF in Investors’ Favor
iShares Bitcoin Trust IBIT amassed about $1.62 billion, despite the slump in bitcoin price. The streak of 71 consecutive days of inflows into IBIT ended in April, yet it is poised to soon become the largest spot bitcoin ETF. Meanwhile, Grayscale Bitcoin Trust ETF GBTC lost assets worth of $2.52 billion.
Cash Cows Gaining Traction
In May, the Pacer U.S. Cash Cows 100 ETF (COWZ - Free Report) saw considerable inflows of $1.3 billion, reinforcing its status as one of the most successful ETFs ever. Currently, it manages $22 billion in AUM.
Leveraged Semiconductors Popular Too
Direxion Daily Semiconductor Bull 3X Shares (SOXL - Free Report) , which has lost 21% in the past month (as of May 2, 2024), attracted about $1.28 billion in assets in April. Chip demand for the AI craze is a crucial crisis right now. Several chip stocks have come up with downbeat earnings lately, dragging the whole space down.
Hence, there could be short-selling pressure in the semiconductor fund, which could be a reason for the swelling of the assets. Plus, many investors probably went for the buy-the-dip strategy.
Not only SOXL, another tech ETF Vanguard Information Technology ETF (VGT - Free Report) pulled in about $1.52 billion in assets. As tech earnings mostly came in upbeat but tech ETFs remained vulnerable due to rising rates, investors probably exercised the buy-the-dip strategy on this ultra-popular tech ETF XLK.
High-Yield Corporate Bonds Bleed
iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD - Free Report) and iShares iBoxx USD High+ Yield Corporate Bond ETF (HYG - Free Report) lost about $3.33 billion and $2.37 billion in assets, respectively, in April. Rising rate worries can be held responsible for this bloodbath. Notably, LQD and HYG yield, respectively, 4.38% and 6.00% annually.
Non-Cyclical Sectors Out of Favor
BothHealth Care Select Sector SPDR Fund (XLV - Free Report) and Consumer Staples Select Sector SPDR Fund (XLP - Free Report) saw $1.28 billion and $1.23 billion in assets gushing out of the funds.