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Wall Street saw a stellar fourth-quarter, with SPDR S&P 500 ETF Trust (SPY) adding 11.2%, SPDR Dow Jones Industrial Average ETF Trust (DIA) rising 10%and Invesco QQQ Trust (QQQ) gaining about 12.9% in the past three months (as of Dec 29, 2020).
Vaccine rollouts, stimulus hopes and Joe Biden’s win with a divided Congress regulated the ETF world in the fourth quarter. Against this backdrop, let’s see which ETFs raked in solid assets and the ones that lost.
Equities Win
Vanguard Total Stock Market ETF (VTI - Free Report) garnered about $13.76 billion in assets in the fourth quarter. Though still not out of woods, the U.S. economy is showing signs of improvement from the COVID-induced slump. With vaccine hopes, investors’ confidence in the global economy has returned.
International ETFs Are Hot
International ETFs like Vanguard Total International Stock ETF (IEFA - Free Report) and iShares Core MSCI Emerging Markets ETF (IEMG) have been dear to investors on receding global growth worries.VXUS and IEMG attracted about $7.10 billion and $5.20 billion in the fourth quarter. Investors should note that subdued greenback has offered support to the emerging market stocks and ETFs in the fourth quarter (read: U.S. Dollar to Remain Weak in 2021? ETFs to Gain).
Total Bond Market Prevails
Vanguard Total Bond Market ETF (BND - Free Report) andVanguard Total International Bond ETF (BNDX) haveadded about $5.50 billion and $4.35 billion in assets. A dovish Fed, ECB, BoJ and several emerging economies kept global interest rates subdued and made these bond ETFs attractive to investors.
iShares Core U.S. Aggregate Bond ETF (AGG - Free Report) attracted about $4.13 billion in assets. Notably, BND and AGG are higher-yielding in nature, offering about 2.38% and 2.15% annually. This attribute made them winners amid the low-yield environment.
Financials Rule
Steepening yield curve as a result of risk-on sentiments boosted bank stocks in the fourth quarter. In any case, financial stocks were beaten down this year and offered attractive bets at the start Q4.
As the broader market rallied, investors dumped this safe-haven metal.SPDR Gold Trust (GLD - Free Report) lost about $60 billion in assets.
Treasuries Slacked
iShares 7-10 Year Treasury Bond ETF (IEF - Free Report) , iShares Short Treasury Bond ETF (SHV) and iShares 1-3 Year Treasury Bond ETF (SHY) lost about $4.89 billion, $2.24 billion and $1.79 billion in assets in the quarter as investors’ attraction for safe-havens took a backseat and intermediate and short-term treasuries yielded lesser than total bond market products.
Low-Volatility ETFs Out of Favor
This is another loser of the soaring stock market. iShares MSCI USA Min Vol Factor ETF (USMV - Free Report) which gives exposure to low-volatility stock and relatively defensive in nature, saw about $2.59 billion of assets gushing out.
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Most Loved/Hated ETFs of Q4
Wall Street saw a stellar fourth-quarter, with SPDR S&P 500 ETF Trust (SPY) adding 11.2%, SPDR Dow Jones Industrial Average ETF Trust (DIA) rising 10%and Invesco QQQ Trust (QQQ) gaining about 12.9% in the past three months (as of Dec 29, 2020).
Vaccine rollouts, stimulus hopes and Joe Biden’s win with a divided Congress regulated the ETF world in the fourth quarter. Against this backdrop, let’s see which ETFs raked in solid assets and the ones that lost.
Equities Win
Vanguard Total Stock Market ETF (VTI - Free Report) garnered about $13.76 billion in assets in the fourth quarter. Though still not out of woods, the U.S. economy is showing signs of improvement from the COVID-induced slump. With vaccine hopes, investors’ confidence in the global economy has returned.
International ETFs Are Hot
International ETFs like Vanguard Total International Stock ETF (IEFA - Free Report) and iShares Core MSCI Emerging Markets ETF (IEMG) have been dear to investors on receding global growth worries.VXUS and IEMG attracted about $7.10 billion and $5.20 billion in the fourth quarter. Investors should note that subdued greenback has offered support to the emerging market stocks and ETFs in the fourth quarter (read: U.S. Dollar to Remain Weak in 2021? ETFs to Gain).
Total Bond Market Prevails
Vanguard Total Bond Market ETF (BND - Free Report) andVanguard Total International Bond ETF (BNDX) haveadded about $5.50 billion and $4.35 billion in assets. A dovish Fed, ECB, BoJ and several emerging economies kept global interest rates subdued and made these bond ETFs attractive to investors.
iShares Core U.S. Aggregate Bond ETF (AGG - Free Report) attracted about $4.13 billion in assets. Notably, BND and AGG are higher-yielding in nature, offering about 2.38% and 2.15% annually. This attribute made them winners amid the low-yield environment.
Financials Rule
Steepening yield curve as a result of risk-on sentiments boosted bank stocks in the fourth quarter. In any case, financial stocks were beaten down this year and offered attractive bets at the start Q4.
Moreover, the Fed recently announced that it will allow the nation’s largest banks to restart share buybacks in the first quarter of 2021 subject to certain rules.Financial Select Sector SPDR Fund (XLF - Free Report) garnered about $3.89 billion in assets.
Gold Loses Its Sheen
As the broader market rallied, investors dumped this safe-haven metal.SPDR Gold Trust (GLD - Free Report) lost about $60 billion in assets.
Treasuries Slacked
iShares 7-10 Year Treasury Bond ETF (IEF - Free Report) , iShares Short Treasury Bond ETF (SHV) and iShares 1-3 Year Treasury Bond ETF (SHY) lost about $4.89 billion, $2.24 billion and $1.79 billion in assets in the quarter as investors’ attraction for safe-havens took a backseat and intermediate and short-term treasuries yielded lesser than total bond market products.
Low-Volatility ETFs Out of Favor
This is another loser of the soaring stock market. iShares MSCI USA Min Vol Factor ETF (USMV - Free Report) which gives exposure to low-volatility stock and relatively defensive in nature, saw about $2.59 billion of assets gushing out.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>