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ETF Investors Flock to Bargain Hunting Amid Volatility
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Last week was a volatile one for the stock market. While inflation fears triggered a sell-off in the broad tech sector and took a toll on the markets early last week, the rebound in the tech sector on bargain hunting made up for some losses to the end the week. Notably, the S&P 500 dropped 0.4% last week while the Dow lost 0.5%. The tech-heavy Nasdaq Composite gained 0.3%.
Amid bouts of volatility, overall ETFs gathered about $11.6 billion capital last week, bringing in year-to-date inflows of $369.4 billion, well above the $131 billion seen in the year-ago period. U.S. fixed income ETFs led the way higher last week with $5.3 billion inflows, closely followed by $3.4 billion in international equity ETFs and $1.1 billion in U.S. equity ETFs, per etf.com (read: 5 Great Value ETFs to Buy as Inflation Fears Grip Markets).
Though fixed income and international equity ETFs gathered most investors’ attention, a few U.S. equity ETFs remained hot last week on bargain hunting. Also, low volatility funds took charge as these have the potential to outpace the broader market in an uncertain environment, providing significant protection to the portfolio. This is because these funds include more stable stocks that have experienced the least price movement in their portfolio.
We have highlighted five of the funds that are the five top creators of last week and continue to be investors’ darling should the current market trends prevail:
SPLV topped the asset flow creation last week, gathering $2.1 billion in capital. This ETF provides exposure to stocks with the lowest realized volatility over the past 12 months. It tracks the S&P 500 Low Volatility Index and holds 120 securities in its basket. SPLV has amassed $8.2 billion in its asset base and trades in heavy volume of around 3.3 million shares a day on average. It charges 25 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Here's Why It's Wise to Invest in Low Volatility ETFs Now).
IWM has accumulated around $1.3 billion in its asset base last week. It is the largest and most-popular ETFs in the small-cap space with AUM of $65.5 billion and holding well-diversified 2,045 stocks in its basket. The fund has key holdings in healthcare, financials, industrials, consumer discretionary and information technology. It charges 19 bps in annual fees and has a Zacks ETF Rank #3 with Medium risk outlook.
The ultra-popular financial ETF, XLF accumulated $1.2 billion 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 $43.6 billion and charges 12 bps in annual fees. It trades in an average daily volume of 50.8 million shares and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
VOO has gathered $1 billion in capital. It tracks the S&P 500 Index and holds 507 stocks in its basket with information technology, healthcare, consumer discretionary, financials and communication services being the top five, with double-digit allocation each. The ETF charges investors 3 bps in annual fees and trades in an average daily volume of 4 million shares. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Capital Gain Tax Hike to Power Inflows: 5 ETFs to Win).
This fund has accumulated $873 million in capital, taking its total AUM to $239.6 billion. It provides exposure to the broad stock market by tracking the CRSP US Total Market Index. The ETF holds a large basket of well-diversified 3781 stocks with key holdings in technology, consumer discretionary, industrials, healthcare and financials. It charges 3 bps in fees per year from investors and trades in an average daily volume 4 million shares. VTI has a Zacks ETF Rank #2 with a Medium risk outlook.
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ETF Investors Flock to Bargain Hunting Amid Volatility
Last week was a volatile one for the stock market. While inflation fears triggered a sell-off in the broad tech sector and took a toll on the markets early last week, the rebound in the tech sector on bargain hunting made up for some losses to the end the week. Notably, the S&P 500 dropped 0.4% last week while the Dow lost 0.5%. The tech-heavy Nasdaq Composite gained 0.3%.
Amid bouts of volatility, overall ETFs gathered about $11.6 billion capital last week, bringing in year-to-date inflows of $369.4 billion, well above the $131 billion seen in the year-ago period. U.S. fixed income ETFs led the way higher last week with $5.3 billion inflows, closely followed by $3.4 billion in international equity ETFs and $1.1 billion in U.S. equity ETFs, per etf.com (read: 5 Great Value ETFs to Buy as Inflation Fears Grip Markets).
Though fixed income and international equity ETFs gathered most investors’ attention, a few U.S. equity ETFs remained hot last week on bargain hunting. Also, low volatility funds took charge as these have the potential to outpace the broader market in an uncertain environment, providing significant protection to the portfolio. This is because these funds include more stable stocks that have experienced the least price movement in their portfolio.
We have highlighted five of the funds that are the five top creators of last week and continue to be investors’ darling should the current market trends prevail:
Invesco S&P 500 Low Volatility ETF (SPLV - Free Report)
SPLV topped the asset flow creation last week, gathering $2.1 billion in capital. This ETF provides exposure to stocks with the lowest realized volatility over the past 12 months. It tracks the S&P 500 Low Volatility Index and holds 120 securities in its basket. SPLV has amassed $8.2 billion in its asset base and trades in heavy volume of around 3.3 million shares a day on average. It charges 25 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Here's Why It's Wise to Invest in Low Volatility ETFs Now).
iShares Russell 2000 ETF (IWM - Free Report)
IWM has accumulated around $1.3 billion in its asset base last week. It is the largest and most-popular ETFs in the small-cap space with AUM of $65.5 billion and holding well-diversified 2,045 stocks in its basket. The fund has key holdings in healthcare, financials, industrials, consumer discretionary and information technology. It charges 19 bps in annual fees and has a Zacks ETF Rank #3 with Medium risk outlook.
Financial Select Sector SPDR Fund (XLF - Free Report)
The ultra-popular financial ETF, XLF accumulated $1.2 billion 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 $43.6 billion and charges 12 bps in annual fees. It trades in an average daily volume of 50.8 million shares and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
Vanguard S&P 500 ETF (VOO - Free Report)
VOO has gathered $1 billion in capital. It tracks the S&P 500 Index and holds 507 stocks in its basket with information technology, healthcare, consumer discretionary, financials and communication services being the top five, with double-digit allocation each. The ETF charges investors 3 bps in annual fees and trades in an average daily volume of 4 million shares. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Capital Gain Tax Hike to Power Inflows: 5 ETFs to Win).
Vanguard Total Stock Market ETF (VTI - Free Report)
This fund has accumulated $873 million in capital, taking its total AUM to $239.6 billion. It provides exposure to the broad stock market by tracking the CRSP US Total Market Index. The ETF holds a large basket of well-diversified 3781 stocks with key holdings in technology, consumer discretionary, industrials, healthcare and financials. It charges 3 bps in fees per year from investors and trades in an average daily volume 4 million shares. VTI has a Zacks ETF Rank #2 with a Medium risk outlook.
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Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>