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May ETF Asset Report: U.S. Equities Rule

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Geopolitical tensions, oil price movement and President Trump’s announcements hit the headlines in the month of May. Donald Trump made impactful announcements pertaining to deregulations, trade relations with other countries and sanctions against countries like Iran and Venezuela. Overall, markets remained upbeat barring some occasional dips.

Still, a flurry of events left investors pondering where to invest their money in and realize gains in the month of May. Let's see how these events impacted asset growth in the ETF industry in May (as of May 29, 2018) (per etf.com):

U.S. Equities Sizzle

The S&P 500 has been on radar as investors flocked to iShares Core S&P 500 ETF (IVV - Free Report) , SPDR S&P 500 ETF Trust (SPY - Free Report) and Vanguard S&P 500 ETF (VOO - Free Report) . Nasdaq-100-based fund PowerShares QQQ Trust (QQQ - Free Report) also got investors’ love. The funds IVV, SPY, VOO and QQQ garnered, respectively, about $5.32 billion, $3.03 billion, $1.04 billion and $1.98 billion in assets in the month. This was a confirmation of solid investor confidence in U.S. equities.

Small Caps in Investors’ Favor

Small-cap U.S. ETF iShares Russell 2000 ETF (IWM - Free Report) also gathered about $1.30 billion. A sturdy dollar, excessive geopolitical tensions and trade worries helped these pint-sized domestically focused stocks. Better domestic economic improvement than other developed economies and deregulations in the banking sector and tax cuts favored U.S. stocks. iShares Core S&P Small Cap ETF (IJR - Free Report) also attracted about $1.16 billion in the month (read: Why Leveraged Small-Cap ETFs Are Going Through the Roof).

High Yield Corporate Bonds Gain

As rising risk concerns were prevalent, investors probably poured money on products that offer benchmark-beating yields. iShares iBoxx USD High Yield Corporate Bond ETF (HYG - Free Report) , which yields as much as 5.14% annually, hauled in about $1.08 billion in the month.

Emerging Markets Step Back

Investors showered their love on emerging markets in early 2018 but May portrayed a different story. Rising dollar and an uptick in U.S. Treasury yield triggered selloffs in the space which is why investors dumped iShares MSCI Emerging Markets ETF (EEM - Free Report) . The fund lost about $1.96 billion in assets.

Bonds Fall Flat

U.S. benchmark Treasury yield hit a high of 3.11% in May amid bets on faster-than-expected Fed rate hike. Tax reform, a pickup in inflation and an upbeat U.S. economy led to the sell-off in the U.S. bond market.  Naturally, iShares 20+ Year Treasury Bond ETF (TLT - Free Report) , iShares Core U.S. Aggregate Bond ETF (AGG - Free Report) and iShares 7-10 Year Treasury Bond ETF (IEF - Free Report) shed about $986.7 million, $475.5 million and $376.4 million, respectively, in the month.

Eurozone Under Pressure

Political crisis mainly emanated from Italy and Spain, not-so-upbeat earnings results, slower economic growth and Trump’s announcement of levying duties on steel and aluminum imports from EU made investors skeptical about Eurozone investment. iShares MSCI Eurozone ETF (EZU - Free Report) saw about $817.6 million funds gushing out (read: Profit from Roman Impasse With These Global Inverse ETFs).

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