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Wall Street witnessed a mixed Q4 due to moderation in inflationary pressures, an expected slowdown in the pace of Fed rate hikes and ongoing geopolitical tensions in Russia and Ukraine. The S&P 500, the Dow Jones and the Russell 2000, gained 3.2%, 11% and 3.2%, respectively while the Nasdaq Composite fell 3.2% in the past three months (as of Dec 21, 2022).
As far as rates are concerned, the benchmark treasury yield started the quarter with 3.67%, hit a high of 4.24% and was at 3.68% at the end of Dec 21, 2022. Against this backdrop, below we highlight a few ETFs that fetched sizable assets in the fourth quarter of 2022.
S&P 500 ETFs Win
SPDR S&P 500 ETF Trust (SPY - Free Report) and iShares Core S&P 500 ETF (IVV - Free Report) amassed about $9.68 billion and $4.28 billion in the fourth quarter, respectively. Cheaper valuation probably lured investors to focus on the S&P 500 ETFs as risk-on sentiments returned to the market. Vanguard Total Stock Market ETF (VTI) also fetched in about $5.70 billion in assets in the quarter.
Tax-Exempt Bond ETFs Win
Vanguard Tax-Exempt Bond ETF (VTEB - Free Report) and iShares National Muni Bond ETF (MUB - Free Report) amassed about $6.07 billion and $3.70 billion in assets so far in the fourth quarter.
Long-Term & High-Yield Bond ETFs Were in Fashion
iShares 20+ Year Treasury Bond ETF (TLT - Free Report) , iShares iBoxx USD High Yield Corporate Bond ETF (HYG - Free Report) , SPDR Bloomberg High Yield Bond ETF (JNK) and Vanguard Total Bond Market ETF (BND) hauled in about $4.59 billion, $4.43 billion, $3.74 billion and $3.65 billion in assets, respectively, in the ongoing fourth quarter. As long-term rates gradually fell over the course of the fourth quarter, long-duration bond ETFs probably fetched investors’ attention.
TIPs Lost Assets
iShares TIPS Bond ETF (TIP - Free Report) lost about $3.62 billion in assets while Vanguard Short-Term Inflation-Protected Securities ETF (VTIP - Free Report) witnessed about $2.41 billion in assets gushing out of the fund. Inflation in the United States is cooling down gradually, underscoring that the worst of inflation has likely passed. CPI jumped 7.1% year over year in November, down from a 7.7% year-over-year increase in October and a recent peak of 9.1% in June. This represents the lowest annual increase since late 2021.
Short-Term Bond ETFs Fell Out of Favor
The monetary policymakers forecast that their key short-term rate will reach 5% to 5.25% by the end of 2023 before being slashed to 4.1% in 2024. That suggests that the Fed is prepared to hike its benchmark rate by additional three-quarters of a point and then stay put until the end of 2023.
This has probably cut demand for short-term bond ETFs like iShares Short Treasury Bond ETF (SHV - Free Report) and PIMCO Enhanced Short Maturity Active ETF (MINT). The funds SHV and MINT lost assets worth $3.34 billion and $2.22 billion, respectively.
Gold Lost Luster
SPDR Gold Trust (GLD - Free Report) and iShares Gold Trust (IAU - Free Report) too have seen assets worth of $1.29 billion and $1.57 billion gushing out of the fund. With inflation falling, gold could not live up to its status of an inflation-protected asset.
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ETF Asset Report of 2022 Q4
Wall Street witnessed a mixed Q4 due to moderation in inflationary pressures, an expected slowdown in the pace of Fed rate hikes and ongoing geopolitical tensions in Russia and Ukraine. The S&P 500, the Dow Jones and the Russell 2000, gained 3.2%, 11% and 3.2%, respectively while the Nasdaq Composite fell 3.2% in the past three months (as of Dec 21, 2022).
As far as rates are concerned, the benchmark treasury yield started the quarter with 3.67%, hit a high of 4.24% and was at 3.68% at the end of Dec 21, 2022. Against this backdrop, below we highlight a few ETFs that fetched sizable assets in the fourth quarter of 2022.
S&P 500 ETFs Win
SPDR S&P 500 ETF Trust (SPY - Free Report) and iShares Core S&P 500 ETF (IVV - Free Report) amassed about $9.68 billion and $4.28 billion in the fourth quarter, respectively. Cheaper valuation probably lured investors to focus on the S&P 500 ETFs as risk-on sentiments returned to the market. Vanguard Total Stock Market ETF (VTI) also fetched in about $5.70 billion in assets in the quarter.
Tax-Exempt Bond ETFs Win
Vanguard Tax-Exempt Bond ETF (VTEB - Free Report) and iShares National Muni Bond ETF (MUB - Free Report) amassed about $6.07 billion and $3.70 billion in assets so far in the fourth quarter.
Long-Term & High-Yield Bond ETFs Were in Fashion
iShares 20+ Year Treasury Bond ETF (TLT - Free Report) , iShares iBoxx USD High Yield Corporate Bond ETF (HYG - Free Report) , SPDR Bloomberg High Yield Bond ETF (JNK) and Vanguard Total Bond Market ETF (BND) hauled in about $4.59 billion, $4.43 billion, $3.74 billion and $3.65 billion in assets, respectively, in the ongoing fourth quarter. As long-term rates gradually fell over the course of the fourth quarter, long-duration bond ETFs probably fetched investors’ attention.
TIPs Lost Assets
iShares TIPS Bond ETF (TIP - Free Report) lost about $3.62 billion in assets while Vanguard Short-Term Inflation-Protected Securities ETF (VTIP - Free Report) witnessed about $2.41 billion in assets gushing out of the fund. Inflation in the United States is cooling down gradually, underscoring that the worst of inflation has likely passed. CPI jumped 7.1% year over year in November, down from a 7.7% year-over-year increase in October and a recent peak of 9.1% in June. This represents the lowest annual increase since late 2021.
Short-Term Bond ETFs Fell Out of Favor
The monetary policymakers forecast that their key short-term rate will reach 5% to 5.25% by the end of 2023 before being slashed to 4.1% in 2024. That suggests that the Fed is prepared to hike its benchmark rate by additional three-quarters of a point and then stay put until the end of 2023.
This has probably cut demand for short-term bond ETFs like iShares Short Treasury Bond ETF (SHV - Free Report) and PIMCO Enhanced Short Maturity Active ETF (MINT). The funds SHV and MINT lost assets worth $3.34 billion and $2.22 billion, respectively.
Gold Lost Luster
SPDR Gold Trust (GLD - Free Report) and iShares Gold Trust (IAU - Free Report) too have seen assets worth of $1.29 billion and $1.57 billion gushing out of the fund. With inflation falling, gold could not live up to its status of an inflation-protected asset.