Back to top

Image: Bigstock

ETF Asset Report of September

Read MoreHide Full Article

The S&P 500 snapped a seven-month winning streak in September, recording about 4.8% monthly drop. The Dow closed out September lower by 4.4%. The Nasdaq underperformed, retreating 5.4% amid a broad rotation away from growth and technology stocks thanks to rising rate worries.

The key reasons for such underperformance were the Fed’s indication that it will start QE tapering in November along with China’s real estate behemoth Evergrande’s default risks and its ripples effects on the global market. Evergrande fears shook the markets on a potential Lehman-like crisis. The adverse seasonality of the month of September also led to this debacle.

Against this backdrop, below we highlight the asset report of September.

S&P 500 Top Favorite

SPDR S&P 500 ETF Trust (SPY - Free Report) , Vanguard S&P 500 ETF (VOO - Free Report) and Vanguard Total Stock Market ETF (VTI) amassed about $7.44 billion and $3.88 billion in assets in September. Though the broader market was downbeat, equity investors brushed aside uncertainty over monetary and fiscal policies and the debates in Washington over the debt ceiling in late September. The buy-the-dip strategy probably helped S&P 500 ETFs swell in assets.

Nasdaq ETF Investors’ Darling Too

ProShares UltraPro QQQ (TQQQ - Free Report) garnered about $2.9 billion in assets in September.The Nasdaq, heavy on technology and growth stocks, recorded its worst day since March on Sep 28. Rising rate worries are responsible for this slump. Benchmark U.S. treasury yield jumped to 1.54% (its highest level since June) on Sep 28 from this month’s low of 1.28% recorded on Sep 14 on the Fed taper cues. But here again, investors preferred to pour assets in the beaten-down Nasdaq ETF (read: Time to Short Nasdaq With These Inverse ETFs?).

Real Estate ETF Winner Too

iShares U.S. Real Estate ETF (IYR - Free Report) also fetched in about $2.34 billion in assets despite the rising rate worries in the month.

Bond Market Were on Tear Too

Vanguard Total Bond Market ETF (BND - Free Report) , Vanguard Short-Term Bond ETF (BSV) and iShares Core U.S. Aggregate Bond ETF (AGG - Free Report) attracted about $1.40 billion, $1.12 billion and $1.08 billion in assets. Rising rate worries led BND lose about 0.8% past month, but that did not deter investors to invest in BND.

Energy Back With a Bang

Energy Select Sector SPDR Fund (XLE - Free Report) hauled in about $1.33 billion in assets. OPEC output cuts and global output disruptions weighed on crude inventories. Growing vaccination and gradual economic reopening have boosted demand for crude also.

No wonder, United States Oil Fund LP (USO - Free Report) is up 8.8% this year. Oil has now hit the highest level in about three years. Moreover, oil drillers in the Gulf of Mexico are still struggling to restore output more than two weeks after Hurricane Ida made landfall on the coast of Louisiana, with almost a third of production still idled (read: 4 Leveraged ETF Areas That Are Up 100% This Year).

Dow Jones Still Way Behind Investors’ Watchlist

SPDR Dow Jones Industrial Average ETF Trust (DIA - Free Report) – the long-time underperformer among the big three U.S. equity indexes – failed catch investors’ attention in September too. The fund lost $916 million in assets.

Financials Retreat Too

Financial Select Sector SPDR Fund (XLF - Free Report) saw assets worth of $1.52 billion gushing out of the fund. The fund amassed good amount of assets in the final week September as it hauled in about $1.40 billion from Sep 22 to Sep 30 to a rise in rates. But overall, the month was downbeat for XLF.