Wall Street was on a dismal ride last week thanks to the Federal Reserve’s hawkish stance. The central bank signaled two interest rate hikes by the end of 2023, sooner than previously expected, sparking worries over future economic growth (read:
Fed Rate Hike in the Cards? ETFs to Buy). The Dow Jones plunged 3.5%, marking its consecutive second weekly fall and the worst week since October, while the S&P 500 shed 1.9% for the week, ending a three-week winning streak. The Nasdaq Composite Index saw a weekly loss of 0.3%, snapping its four-week long rally. Despite the slide, investors rushed to U.S. equity ETFs to tap the bargain prices. This is especially true as the economy is on a strong recovery path. The Fed said that the progress in vaccination has reduced the spread of COVID-19 in the United States, and economic activity and employment have strengthened. It raised the GDP growth forecast from 6.5% to 7% for this year, which would be the fastest calendar-year expansion since 1984. Given this, ETFs overall gathered about $38.3 billion capital last week, bringing in inflows of $455.8 billion year to date, more than double the $198.4 billion seen in the year-ago period. U.S. equity ETFs led the way higher last week with $27.3 billion inflows, closely followed by $7.9 billion in international equity ETFs and $3.3 billion in U.S. fixed income ETFs, per etf.com. In fact, U.S. equity funds claimed the top seven spots for the ETFs with the largest combined inflows of nearly $15 billion last week. We have highlighted five of them that took charge and can continue to be investors’ darlings should the current market trends prevail: Vanguard Growth ETF ( VUG Quick Quote VUG - Free Report) Last week, SPY topped asset flow creation, gathering $2.8 billion in capital. It offers exposure to the large-capitalization growth stocks by tracking the CRSP US Large Cap Growth Index. It holds 280 stocks in its basket and charges 4 bps in annual fees. Technology takes the largest share at 46.6% of portfolio while consumer discretionary, and industrials round off the next two spots. The fund has amassed $78.2 billion shares and trades in an average daily volume of 767,000 shares. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: A Quick Guide to the 25 Cheapest ETFs). Vanguard Total Stock Market ETF ( VTI Quick Quote VTI - Free Report) This fund has accumulated $2.5 billion in capital, taking its total AUM to $249.2 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 3791 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 3.6 million shares. VTI has a Zacks ETF Rank #2 with a Medium risk outlook. iShares Core S&P 500 ETF ( IVV Quick Quote IVV - Free Report) This fund, which tracks the S&P 500 Index, saw inflows of $2.5 billion. It holds 505 stocks in its basket with information technology, healthcare, consumer discretionary, communications and financials being the top five, with a 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 with a Medium risk outlook (read: ETFs to Ride Current Market Optimism on Strong Economic Data). Invesco QQQ ( QQQ Quick Quote QQQ - Free Report) This ETF accumulated around $2.3 billion in its asset base last week. It provides exposure to the 102 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Information technology accounts for 48.4% of the assets while communication services and consumer discretionary round off the next two spots. QQQ is one of the largest and most-popular ETFs in the large-cap space with an AUM of $165.9 billion and an average daily volume of 37.4 million shares. It charges investors 20 bps in annual fees. The fund has a Zacks ETF Rank #2 with a Medium risk outlook. Vanguard Mid-Cap ETF ( VO Quick Quote VO - Free Report) VO has gathered around $1.7 billion in capital, taking its total AUM to $50.7 billion. It offers exposure to the mid-cap segment of the broad market and tracks the CRSP US Mid Cap Index. It holds 366 stocks in its basket with information technology, consumer discretionary, industrials, financials and healthcare have a double-digit exposure each. The ETF charges investors 4 bps in annual fees and trades in an average daily volume of 536,000 shares. It has a Zacks ETF Rank #2 with a Medium risk outlook (read: 5 Popular Mid-Cap ETFs to Add to Your Portfolio Now). Want key ETF info delivered straight to your inbox?
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