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The U.S. stock market ended 2021 with double-digit annual gains for the third consecutive year. With a skyrocketing stock market, the global ETF industry is also booming, breaking new records in terms of inflows. This is especially true as investors poured about $900 billion in new assets into U.S.-listed ETFs in 2021.
The record inflows in ETFs were driven by the rise in the stock market and a lack of high-yielding alternatives. The low-cost passively managed U.S. funds that track indexes run by Vanguard Group, BlackRock and State Street, which together control more than 75% of all U.S. ETF assets, were the biggest money pullers in 2021. SPDR S&P 500 ETF Trust (SPY - Free Report) , Vanguard S&P 500 ETF (VOO - Free Report) , Vanguard Total Stock Market ETF (VTI - Free Report) , iShares Core S&P 500 ETF (IVV - Free Report) , and Invesco QQQ Trust (QQQ - Free Report) led the asset flow list last year.
Passively managed funds were attractive, courtesy of their unique strategies, creativity, transparency, diversification benefits, enhanced tax competencies, low turnover and, of course, low cost. Additionally, new actively managed fund launches in the space with narrow themes or unfilled niche markets drove demand. More than half of the record 380 ETFs launched in the United States in 2021 are actively managed, according to FactSet. Further, ETFs that hold inflation-protected bonds also enjoyed a surge in investor interest due to the rise in inflation. However, these still represent a small proportion of the total inflows (read: 5 Hot ETFs of 2021 Driving Global Inflows to Record $1T).
SPDR S&P 500 ETF Trust topped asset flow creation last year, gathering $103 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket, with each accounting for no more than 7% of assets. SPDR S&P 500 ETF Trust is heavy on the information technology sector, while healthcare, consumer discretionary, financials and communication services rounding off the next four spots with a double-digit allocation each.
SPDR S&P 500 ETF Trust charges investors 9 bps in annual fees and trades in an average daily volume of 65.5 million shares. It has AUM of $455 billion and a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Vanguard S&P 500 ETF accumulated $88.3 billion in capital. It tracks the S&P 500 Index and holds 512 stocks in its basket, each accounting for more than 6.6% of assets. Vanguard S&P 500 ETF is heavy on the information technology sector while consumer discretionary, healthcare, financials and communication services round off its next four spots with a double-digit allocation each.
Vanguard S&P 500 ETF charges investors 3 bps in annual fees and trades in an average daily volume of 5 million shares. It has AUM of $280.2 billion and a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: 5 Top ETF Stories of 2021 That May Influence 2022 Trends).
Vanguard Total Stock Market ETF gathered $85.7 billion in capital, taking its total AUM to $299.4 billion. It provides exposure to the broader stock market by tracking the CRSP US Total Market Index. Vanguard Total Stock Market ETF holds a large basket of well-diversified 4,156 stocks with key holdings in technology, consumer discretionary, industrials, healthcare and financials.
Vanguard Total Stock Market ETF charges 3 bps in fees per year from investors and trades in an average daily volume of 3.6 million shares. VTI has a Zacks ETF Rank #2 with a Medium risk outlook.
iShares Core S&P 500 ETF pulled in $82.5 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket, each accounting for no more than 7% of assets. IVV is heavy on the information technology sector, while healthcare, consumer discretionary, financials and communication round off its next four spots with a double-digit allocation each.
iShares Core S&P 500 ETF charges investors 3 bps in annual fees and trades in an average daily volume of 4.6 million shares. It has AUM of $335.9 billion and a Zacks ETF Rank #2 with a Medium risk outlook.
Invesco QQQ gathered about $53.6 billion in its asset base last year. QQQ provides exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Invesco QQQ is heavily concentrated on the top two firms with a double-digit allocation, while other firms hold no more than 6.8% of assets. The product is also heavily tilted toward information technology at 51%, while communication services and consumer discretionary round off the next two spots (read: Best-Performing ETFs of Fourth Quarter).
Invesco QQQ is one of the largest and most popular ETFs in the large-cap space, with AUM of $217.2 billion and an average daily volume of 46 million shares. QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
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5 Most Loved ETFs of 2021
The U.S. stock market ended 2021 with double-digit annual gains for the third consecutive year. With a skyrocketing stock market, the global ETF industry is also booming, breaking new records in terms of inflows. This is especially true as investors poured about $900 billion in new assets into U.S.-listed ETFs in 2021.
The record inflows in ETFs were driven by the rise in the stock market and a lack of high-yielding alternatives. The low-cost passively managed U.S. funds that track indexes run by Vanguard Group, BlackRock and State Street, which together control more than 75% of all U.S. ETF assets, were the biggest money pullers in 2021. SPDR S&P 500 ETF Trust (SPY - Free Report) , Vanguard S&P 500 ETF (VOO - Free Report) , Vanguard Total Stock Market ETF (VTI - Free Report) , iShares Core S&P 500 ETF (IVV - Free Report) , and Invesco QQQ Trust (QQQ - Free Report) led the asset flow list last year.
Passively managed funds were attractive, courtesy of their unique strategies, creativity, transparency, diversification benefits, enhanced tax competencies, low turnover and, of course, low cost. Additionally, new actively managed fund launches in the space with narrow themes or unfilled niche markets drove demand. More than half of the record 380 ETFs launched in the United States in 2021 are actively managed, according to FactSet. Further, ETFs that hold inflation-protected bonds also enjoyed a surge in investor interest due to the rise in inflation. However, these still represent a small proportion of the total inflows (read: 5 Hot ETFs of 2021 Driving Global Inflows to Record $1T).
Let’s delve into the five ETFs in detail below:
SPDR S&P 500 ETF Trust (SPY - Free Report)
SPDR S&P 500 ETF Trust topped asset flow creation last year, gathering $103 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket, with each accounting for no more than 7% of assets. SPDR S&P 500 ETF Trust is heavy on the information technology sector, while healthcare, consumer discretionary, financials and communication services rounding off the next four spots with a double-digit allocation each.
SPDR S&P 500 ETF Trust charges investors 9 bps in annual fees and trades in an average daily volume of 65.5 million shares. It has AUM of $455 billion and a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Vanguard S&P 500 ETF (VOO - Free Report)
Vanguard S&P 500 ETF accumulated $88.3 billion in capital. It tracks the S&P 500 Index and holds 512 stocks in its basket, each accounting for more than 6.6% of assets. Vanguard S&P 500 ETF is heavy on the information technology sector while consumer discretionary, healthcare, financials and communication services round off its next four spots with a double-digit allocation each.
Vanguard S&P 500 ETF charges investors 3 bps in annual fees and trades in an average daily volume of 5 million shares. It has AUM of $280.2 billion and a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: 5 Top ETF Stories of 2021 That May Influence 2022 Trends).
Vanguard Total Stock Market ETF (VTI - Free Report)
Vanguard Total Stock Market ETF gathered $85.7 billion in capital, taking its total AUM to $299.4 billion. It provides exposure to the broader stock market by tracking the CRSP US Total Market Index. Vanguard Total Stock Market ETF holds a large basket of well-diversified 4,156 stocks with key holdings in technology, consumer discretionary, industrials, healthcare and financials.
Vanguard Total Stock Market ETF charges 3 bps in fees per year from investors and trades in an average daily volume of 3.6 million shares. VTI has a Zacks ETF Rank #2 with a Medium risk outlook.
iShares Core S&P 500 ETF (IVV - Free Report)
iShares Core S&P 500 ETF pulled in $82.5 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket, each accounting for no more than 7% of assets. IVV is heavy on the information technology sector, while healthcare, consumer discretionary, financials and communication round off its next four spots with a double-digit allocation each.
iShares Core S&P 500 ETF charges investors 3 bps in annual fees and trades in an average daily volume of 4.6 million shares. It has AUM of $335.9 billion and a Zacks ETF Rank #2 with a Medium risk outlook.
Invesco QQQ Trust (QQQ - Free Report)
Invesco QQQ gathered about $53.6 billion in its asset base last year. QQQ provides exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Invesco QQQ is heavily concentrated on the top two firms with a double-digit allocation, while other firms hold no more than 6.8% of assets. The product is also heavily tilted toward information technology at 51%, while communication services and consumer discretionary round off the next two spots (read: Best-Performing ETFs of Fourth Quarter).
Invesco QQQ is one of the largest and most popular ETFs in the large-cap space, with AUM of $217.2 billion and an average daily volume of 46 million shares. QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.