The S&P 500 and the Nasdaq Composite added about 0.5% and 4% past month, respectively, and the Dow Jones lost about 1.3%. However, small caps were still a winner as the Russell 2000 ETF
IWM gained 4.8% past month (as of Feb 1, 2021).
Stocks were at their all-time highs in first part of January on optimism over more stimulus from Washington (thanks to Democrats’ hold over Senate and Biden’s inauguration), the surge in coronavirus cases and some downbeat economic data points as well as the retail trading frenzy in some specific stocks in the month-end disbalanced the market momentum.
Against this backdrop, below we highlight the ETF areas that amassed assets meaningfully in the month and those that failed to do so.
U.S. Stock Market Top
The S&P 500 reached a fresh high in January. In fact, there was a broad-based rally in the market on hopes of fatter stimulus. No wonder,
Vanguard Total Stock Market ETF (accumulated about $2.72 billion in assets in the month and became the highest asset grosser. VTI Quick Quote VTI - Free Report) iShares Core S&P 500 ETF ( IVV Quick Quote IVV - Free Report) , iShares ESG Aware MSCI USA ETF ESGU and Vanguard S&P 500 ETF VOO fetched in about $2.08 billion, $1.93 billion and $1.93 billion, respectively, in January. Bond Markets Rule Too Vanguard Total Bond Market ETF ( BND Quick Quote BND - Free Report) and iShares Core U.S. Aggregate Bond ETF ( AGG Quick Quote AGG - Free Report) attracted about $2.13 billion and $2.13 billion, respectively, in January. Vanguard Intermediate-Term Corporate Bond ETF (VCIT) amassed about $1.85 billion in assets.
Fears of a global slowdown amid rising coronavirus cases and policy easing kept the treasury bond yields low in the month. Moreover, retail trading frenzy over
GameStop ( GME Quick Quote GME - Free Report) and silver bolstered by Reddit’s WallStreetBets forum caused momentum loss at the end of the month. This, in turn, probably led investors turn to the safe-haven bets like bonds (read: GameStop, Reddit Frenzy and Silver ETFs). Small Caps in Favor Too
Small-cap ETFs were in much demand as
Vanguard Small-Cap ETF (added about $1.78 billion in assets. Solid fiscal stimulus in the Biden Presidency drove investors toward this segment. This is especially true given that small-cap stocks are closely related to the domestic economy. VB yields 1.10% annually while it charges 5 bps in fees. However, VB Quick Quote VB - Free Report) iShares Russell 2000 ETF (lost about $2.67 billion in assets probably because it charges more (19 bps in fees) and yields 0.97% annually. IWM Quick Quote IWM - Free Report) High-Yield ETFs Bled Assets iShares iBoxx USD High Yield Corporate Bond ETF ( has shed about $1.39 billion in the month, followed by HYG Quick Quote HYG - Free Report) SPDR Bloomberg Barclays High Yield Bond ETF (JNK) (exodus of $1.34 billion). Vanguard Short-Term Corporate Bond ETF (VCSH) lost about $1.17 billion in assets. Value ETFs Out of Favor iShares Russell 1000 Value ETF (and IWD Quick Quote IWD - Free Report) SPDR Portfolio S&P 500 Value ETF (SPYV) shed about $1.23 billion and $710.9 million in assets, respectively. As rates treaded lower in the month, value investing lost its appeal. Want key ETF info delivered straight to your inbox?
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