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The global stock market ended 2020 on a high note amid the COVID-19 pandemic. Global easing policies and the rollout of vaccines raised the appeal for riskier assets as the combination led to a faster-than-expected recovery.
Overall, ETFs gathered $507.4 billion in 2020 per eftf.com, surpassing the previous record of $476.1 billion inflows reached in 2017, up 55% from $326.3 billion registered in 2019. U.S. fixed income ETFs led the way, accumulating $185 billion followed by inflows of $168.2 billion for U.S. equity ETFs and $71 billion for international equity ETFs.
Fixed Income ETFs Rock
The fixed income world gained investors' love last year amid the declining yields and the pandemic, which prompted investors’ to safe avenues. In particular, corporate bonds saw an influx of capital, driven by the Fed’s unprecedented corporate debt purchasing program to support credit markets and bolster liquidity amid the coronavirus pandemic (read: Fed's Support Boosts Inflows in Bond ETFs: 5 Top Picks).
Four U.S. fixed income ETFs and one international fixed income ETF claimed spots on the top 10 inflows list: Vanguard Total Bond Market ETF (BND - Free Report) , iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD - Free Report) , Vanguard Intermediate-Term Corporate Bond ETF (VCIT), iShares Core U.S. Aggregate Bond ETF (AGG) and Vanguard Total International Bond ETF (BNDX). These funds amassed $17.2 billion, $15 billion, $14.7 billion, $12.4 billion and $11.9 billion, respectively. Both LQD and VCIT currently have a Zacks ETF Rank #2 (Buy).
U.S. Equity ETFs: A Sweet Spot
The year 2020 was filled with historic twists and turns. After slipping into a bear market in late March, Wall Street made an astonishing comeback with major indices soaring to historic highs. This is especially true against the backdrop of super-easy monetary policies coupled with the COVID-19 vaccine optimism (read: Top & Flop Zones of 2020 and Their ETFs).
As a result, Vanguard Total Stock Market ETF (VTI - Free Report) was the most-loved ETF of 2020, pulling in y $32.3 billion in capital. It provides exposure to the broad stock market by tracking the CRSP US Total Market Index. Vanguard S&P 500 ETF (VOO - Free Report) and Invesco QQQ (QQQ - Free Report) saw inflows of $21.4 billion and $17.7 billion, respectively. VOO invests in stocks on the S&P 500 Index while QQQ provides exposure to the largest domestic and international non-financial companies listed on the Nasdaq. VTI has a Zacks ETF Rank #3 (Hold), VOO has a Zacks ETF Rank #2 and QQQ has a Zacks ETF Rank #1 (Strong Buy).
Meanwhile, SPDR S&P 500 ETF Trust (SPY - Free Report) led the redemptions list with $21.9 billion in outflows. This fund also has a Zacks ETF Rank #2.
Gold Glitters
The appeal for gold, as a great store of value and hedge against market turmoil, was on a rise due to COVID-19 pandemic. The number of fiscal and monetary policies adopted by the government and the central banks across the globe to combat the sharp economic slowdown due to the prevalent pandemic added to the yellow metal’s strength. As a result, the ultra-popular product tracking this bullion SPDR Gold Trust ETF (GLD - Free Report) gathered $15.1 billion in capital last year, propelling its total AUM to $71 billion. GLD has a Zacks ETF Rank #3.
Mixed Bag for International Equity
While Vanguard Total International Stock ETF (VXUS - Free Report) gathered $15.8 billion in capital during 2020, iShares MSCI EAFE ETF (EFA - Free Report) stood second on the redemptions list with nearly $12 billion in outflows. VXUS offers exposure to companies located in the developed and emerging markets excluding the United States while EFA offers exposure to a broad range of companies in Europe, Australia, Asia and the Far East. Both funds have a Zacks ETF Rank #3 (read: Top Foreign ETFs of 2020 That Are Up At Least 40%).
Emerging markets were the major culprits with the two ultra-popular ETFs, namely iShares MSCI Emerging Markets ETF (EEM - Free Report) and Vanguard FTSE Emerging Markets ETF (VWO - Free Report) seeing outflows of $4.6 billion and $3.2 billion, respectively. EEM has a Zacks ETF Rank #4 (Sell) while VWO has a Zacks ETF Rank #3.
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Most Loved and Hated ETFs of 2020
The global stock market ended 2020 on a high note amid the COVID-19 pandemic. Global easing policies and the rollout of vaccines raised the appeal for riskier assets as the combination led to a faster-than-expected recovery.
Notably, the S&P 500 Index rose 18.4% last year while the Bloomberg Barclays US Aggregate Bond Index jumped 7.5% (read: 5 Big ETF Stories of 2020 Worth Watching in 2021).
Overall, ETFs gathered $507.4 billion in 2020 per eftf.com, surpassing the previous record of $476.1 billion inflows reached in 2017, up 55% from $326.3 billion registered in 2019. U.S. fixed income ETFs led the way, accumulating $185 billion followed by inflows of $168.2 billion for U.S. equity ETFs and $71 billion for international equity ETFs.
Fixed Income ETFs Rock
The fixed income world gained investors' love last year amid the declining yields and the pandemic, which prompted investors’ to safe avenues. In particular, corporate bonds saw an influx of capital, driven by the Fed’s unprecedented corporate debt purchasing program to support credit markets and bolster liquidity amid the coronavirus pandemic (read: Fed's Support Boosts Inflows in Bond ETFs: 5 Top Picks).
Four U.S. fixed income ETFs and one international fixed income ETF claimed spots on the top 10 inflows list: Vanguard Total Bond Market ETF (BND - Free Report) , iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD - Free Report) , Vanguard Intermediate-Term Corporate Bond ETF (VCIT), iShares Core U.S. Aggregate Bond ETF (AGG) and Vanguard Total International Bond ETF (BNDX). These funds amassed $17.2 billion, $15 billion, $14.7 billion, $12.4 billion and $11.9 billion, respectively. Both LQD and VCIT currently have a Zacks ETF Rank #2 (Buy).
U.S. Equity ETFs: A Sweet Spot
The year 2020 was filled with historic twists and turns. After slipping into a bear market in late March, Wall Street made an astonishing comeback with major indices soaring to historic highs. This is especially true against the backdrop of super-easy monetary policies coupled with the COVID-19 vaccine optimism (read: Top & Flop Zones of 2020 and Their ETFs).
As a result, Vanguard Total Stock Market ETF (VTI - Free Report) was the most-loved ETF of 2020, pulling in y $32.3 billion in capital. It provides exposure to the broad stock market by tracking the CRSP US Total Market Index. Vanguard S&P 500 ETF (VOO - Free Report) and Invesco QQQ (QQQ - Free Report) saw inflows of $21.4 billion and $17.7 billion, respectively. VOO invests in stocks on the S&P 500 Index while QQQ provides exposure to the largest domestic and international non-financial companies listed on the Nasdaq. VTI has a Zacks ETF Rank #3 (Hold), VOO has a Zacks ETF Rank #2 and QQQ has a Zacks ETF Rank #1 (Strong Buy).
Meanwhile, SPDR S&P 500 ETF Trust (SPY - Free Report) led the redemptions list with $21.9 billion in outflows. This fund also has a Zacks ETF Rank #2.
Gold Glitters
The appeal for gold, as a great store of value and hedge against market turmoil, was on a rise due to COVID-19 pandemic. The number of fiscal and monetary policies adopted by the government and the central banks across the globe to combat the sharp economic slowdown due to the prevalent pandemic added to the yellow metal’s strength. As a result, the ultra-popular product tracking this bullion SPDR Gold Trust ETF (GLD - Free Report) gathered $15.1 billion in capital last year, propelling its total AUM to $71 billion. GLD has a Zacks ETF Rank #3.
Mixed Bag for International Equity
While Vanguard Total International Stock ETF (VXUS - Free Report) gathered $15.8 billion in capital during 2020, iShares MSCI EAFE ETF (EFA - Free Report) stood second on the redemptions list with nearly $12 billion in outflows. VXUS offers exposure to companies located in the developed and emerging markets excluding the United States while EFA offers exposure to a broad range of companies in Europe, Australia, Asia and the Far East. Both funds have a Zacks ETF Rank #3 (read: Top Foreign ETFs of 2020 That Are Up At Least 40%).
Emerging markets were the major culprits with the two ultra-popular ETFs, namely iShares MSCI Emerging Markets ETF (EEM - Free Report) and Vanguard FTSE Emerging Markets ETF (VWO - Free Report) seeing outflows of $4.6 billion and $3.2 billion, respectively. EEM has a Zacks ETF Rank #4 (Sell) while VWO has a Zacks ETF Rank #3.
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 >>