The soaring stock market has been increasing investors’ risk appetite. After recording a historic rally in November, the U.S. stock market is showing no signs of slowdown. All the three major indices closed at record highs last week (read:
S&P 500 Set to Climb Higher in 2021: Bet on These ETFs). The slew of encouraging reports on the effectiveness of COVID-19 vaccines has raised hopes for global economic recovery, instilling huge confidence among investors. Additionally, the latest jobs data for November revealed the slowest U.S. jobs growth in six months that has spurred expectations for a new fiscal relief bill to help revive the coronavirus-hit economy. Against such a backdrop, ETFs overall gathered about $10.9 billion capital last week, bringing in year-to-date inflows of $441.6 billion, ahead of the $280.2 billion seen at this same time a year ago. In fact, 2020 has been on track to be the greatest year for ETF inflows. International equity ETFs led the way higher last week with $6.2 billion inflows, closely followed by $3.5 billion in U.S. fixed income ETFs and $1.7 billion in U.S. equity ETFs, per etf.com. U.S. Equity Shines
Though international equity ETFs garnered maximum capital last week, most of the U.S. equity ETFs dominate the list of the top 10 creations.
Invesco QQQ ( was the most-loved ETF with massive inflows of $1.1 billion last week, followed by $988 million in QQQ Quick Quote QQQ - Free Report) iShares Russell 2000 ETF (. QQQ, having a Zacks ETF Rank #1 (Strong Buy), provides exposure to the largest domestic and international non-financial companies listed on the Nasdaq. IWM targets the small-cap segment of the broad U.S. market and has a Zacks ETF Rank #3 (Hold) (read: IWM Quick Quote IWM - Free Report) 5 Hot ETFs of November to Continue Gaining Investor's Love). Vanguard Total Stock Market ETF (pulled in $586 million in capital while VTI Quick Quote VTI - Free Report) iShares Core S&P 500 ETF ( attracted $448 million in its asset base last week. VTI provides diversified exposure across all market caps as well as growth and value styles, while IVV measures the large-cap segment of the broad U.S. market. The former has a Zacks ETF Rank #3 while IVV has a Zacks ETF Rank #2 (Buy). IVV Quick Quote IVV - Free Report) Fixed Income Rocks
Under this category,
iShares 20+ Treasury Bond ETF (was a hot product last week, pulling in more than $653 million in assets. This was followed by inflows of $592 million for TLT Quick Quote TLT - Free Report) iShares TIPS Bond ETF (and $531 million for TIP Quick Quote TIP - Free Report) iShares Core U.S. Aggregate Bond ETF (. TLT provides access to long-term U.S. Treasury bonds and has a Zacks ETF Rank #3. TIP offers exposure to U.S. TIPS, which are government bonds whose face value rises with inflation while AGG offer exposure to a broad range of U.S. investment grade corporate bonds. AGG Quick Quote AGG - Free Report) The twin expectations that the stimulus will lift inflation and the economy will provide a boost to the corporate bonds has lead investors to these ETFs. Financials Tops, Consumer Staples Flops
Vaccine optimism has brought back the lure for the cyclical sector ETFs like
Financial Select Sector SPDR Fund (. This is because cyclical sectors are tied to economic activities and thus outperform when economic growth improves (read: XLF Quick Quote XLF - Free Report) Cyclical Sector Outperforming: 6 Cheap ETFs to Track). XLF seeks to provide exposure to companies in the diversified financial services, insurance, banks, capital markets, mortgage real estate investment trusts ("REITs"), consumer finance, and thrifts and mortgage finance industries. It has attracted $469 million in its asset base, propelling its AUM to $23 billion. The fund has a Zacks ETF Rank #2. Being a defensive scetor, Consumer Staples Select Sector SPDR Fund (saw outflows of $282 million and has a Zacks ETF Rank #3. XLP Quick Quote XLP - Free Report) Gold ETFs Bleed
The two popular gold ETFs —
iShares Gold Trust (and IAU Quick Quote IAU - Free Report) SPDR Gold Trust (— saw outflows of nearly $300 million each. Both ETFs track the performance of the price of gold bullion and are backed by a physical asset. Vaccine optimism and a surging stock market has diminished the appeal for gold as a store of value and hedge against market turmoil. The duo has a Zacks ETF Rank #3. GLD Quick Quote GLD - Free Report) Want key ETF info delivered straight to your inbox?
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