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The U.S. stock market witnessed volatility last week due to the sell-off in growth stocks led by the technology sector. Additionally, investors turned cautious with the start of May as the old adage “Sell in May and Go Away,” says that the performance of the stock market has been historically weak during the summer months (May to October). Still, the S&P 500 and Dow Jones hit new record highs on solid earnings growth.
The corporate results have turned out better than expected with all-around strength and momentum. Earnings from the 425 S&P members that have reported Q1 results so far are up 47% on 10.3% higher revenues, with 85.9% beating EPS estimates and 76.7% beating revenue estimates. Both earnings and revenue growth are tracking above the group’s recent trend, including the pre-pandemic period (read: ETFs to Play the Strong Q1 Earnings Trend).
In fact, the overall Q1 total earnings are on track to reach a new all-time quarterly record. Further, estimates for the current and coming quarters are steadily going up — a trend that has been in place since last summer. The positive revisions trend is likely to accelerate in the coming months as we start looking past the pandemic.
Given this, overall ETFs gathered about $15.3 billion capital last week, bringing in year-to-date inflows of $335.7 billion, well ahead the $115.8 billion seen in the year-ago period. U.S. equity ETFs led the way higher last week with $7.5 billion inflows, closely followed by $2.6 billion in U.S. fixed income and $2.2 billion in international equity ETFs, per etf.com.
As such, a few ETFs garnered solid investor interest last week and will continue to be their darlings should the current market trends prevail. Below we have highlighted five of them:
HYG topped the asset flow creation last week, gathering $2.2 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket with each accounting for no more than 5.8% share. The fund is widely spread across sectors with information technology, healthcare, consumer discretionary, financials and communication services being the top five, with double-digit allocation each. SPY is the biggest ETF in the space with AUM of $361.8 billion and expense ratio of 0.09%. It trades in an average daily volume of 76.8 million shares and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
The ultra-popular financial ETF, XLF accumulated $837.9 million last week. It seeks to provide exposure to 65 companies in the diversified financial services, insurance, banks, capital markets, mortgage real estate investment trusts, consumer finance, and thrifts and mortgage finance industries. The product has AUM of $42.7 billion and charges 12 bps in annual fees. It trades in an average daily volume of 55.2 million shares and has a Zacks ETF Rank #3 with a Medium risk outlook (read: Capital Gain Tax Hike to Power Inflows: 5 ETFs to Win).
IEFA, which offers exposure to a broad range of companies in Europe, Australia, Asia and the Far East, accumulated $819.4 billion in capital last week. It follows the MSCI EAFE IMI Index and holds a broad basket of 2834 stocks with each accounting for less than 1.8% share. The fund has expense ratio of 0.07% and trades in an average daily volume of 8.1 million shares. It has a Zacks ETF Rank #3 with a Low risk outlook.
This fund, which also tracks the S&P 500, saw inflows of $780.6 million. It is one of the most popular ETF with AUM of $277.7 billion and an average daily volume of 4.1 million shares. The product charges 6 bps lower that of State Street product and has a Zacks ETF Rank #3 with a Medium risk outlook.
This fund has accumulated $742.1 million in capital, bringing its total AUM to $26.7 billion. It is the most-popular healthcare ETF and follows the Health Care Select Sector Index. In total, the fund holds 62 securities in its basket with key holdings in pharma, healthcare equipment and supplies, healthcare providers and services, and biotech. This fund trades in heavy volume of around 8.9 million shares and charges 12 bps in annual fees. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Leveraged ETFs That Gained Double Digits in April).
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5 ETFs That Are Investors' Favorites to Start May
The U.S. stock market witnessed volatility last week due to the sell-off in growth stocks led by the technology sector. Additionally, investors turned cautious with the start of May as the old adage “Sell in May and Go Away,” says that the performance of the stock market has been historically weak during the summer months (May to October). Still, the S&P 500 and Dow Jones hit new record highs on solid earnings growth.
The corporate results have turned out better than expected with all-around strength and momentum. Earnings from the 425 S&P members that have reported Q1 results so far are up 47% on 10.3% higher revenues, with 85.9% beating EPS estimates and 76.7% beating revenue estimates. Both earnings and revenue growth are tracking above the group’s recent trend, including the pre-pandemic period (read: ETFs to Play the Strong Q1 Earnings Trend).
In fact, the overall Q1 total earnings are on track to reach a new all-time quarterly record. Further, estimates for the current and coming quarters are steadily going up — a trend that has been in place since last summer. The positive revisions trend is likely to accelerate in the coming months as we start looking past the pandemic.
Given this, overall ETFs gathered about $15.3 billion capital last week, bringing in year-to-date inflows of $335.7 billion, well ahead the $115.8 billion seen in the year-ago period. U.S. equity ETFs led the way higher last week with $7.5 billion inflows, closely followed by $2.6 billion in U.S. fixed income and $2.2 billion in international equity ETFs, per etf.com.
As such, a few ETFs garnered solid investor interest last week and will continue to be their darlings should the current market trends prevail. Below we have highlighted five of them:
SPDR S&P 500 ETF Trust (SPY - Free Report)
HYG topped the asset flow creation last week, gathering $2.2 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket with each accounting for no more than 5.8% share. The fund is widely spread across sectors with information technology, healthcare, consumer discretionary, financials and communication services being the top five, with double-digit allocation each. SPY is the biggest ETF in the space with AUM of $361.8 billion and expense ratio of 0.09%. It trades in an average daily volume of 76.8 million shares and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Financial Select Sector SPDR Fund (XLF - Free Report)
The ultra-popular financial ETF, XLF accumulated $837.9 million last week. It seeks to provide exposure to 65 companies in the diversified financial services, insurance, banks, capital markets, mortgage real estate investment trusts, consumer finance, and thrifts and mortgage finance industries. The product has AUM of $42.7 billion and charges 12 bps in annual fees. It trades in an average daily volume of 55.2 million shares and has a Zacks ETF Rank #3 with a Medium risk outlook (read: Capital Gain Tax Hike to Power Inflows: 5 ETFs to Win).
iShares Core MSCI EAFE ETF (IEFA - Free Report)
IEFA, which offers exposure to a broad range of companies in Europe, Australia, Asia and the Far East, accumulated $819.4 billion in capital last week. It follows the MSCI EAFE IMI Index and holds a broad basket of 2834 stocks with each accounting for less than 1.8% share. The fund has expense ratio of 0.07% and trades in an average daily volume of 8.1 million shares. It has a Zacks ETF Rank #3 with a Low risk outlook.
iShares Core S&P 500 ETF (IVV - Free Report)
This fund, which also tracks the S&P 500, saw inflows of $780.6 million. It is one of the most popular ETF with AUM of $277.7 billion and an average daily volume of 4.1 million shares. The product charges 6 bps lower that of State Street product and has a Zacks ETF Rank #3 with a Medium risk outlook.
Health Care Select Sector SPDR Fund (XLV - Free Report)
This fund has accumulated $742.1 million in capital, bringing its total AUM to $26.7 billion. It is the most-popular healthcare ETF and follows the Health Care Select Sector Index. In total, the fund holds 62 securities in its basket with key holdings in pharma, healthcare equipment and supplies, healthcare providers and services, and biotech. This fund trades in heavy volume of around 8.9 million shares and charges 12 bps in annual fees. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Leveraged ETFs That Gained Double Digits in April).
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 >>