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Wall Street was downbeat in December with muted Santa Clause Rally. The S&P 500 was off 5.7%, the Dow Jones has lost 3.7%, the Nasdaq Composite has retreated about 8.7% and the Russell 2000 has fallen about 7% past month (as of Dec 30, 2022).
In fact, the month snapped two consecutive months of gains. While recession fears were triggered by the relentless market forecasts, rising COVID cases in China and the advent of a new sub-variant of Omicron Covid-19 virus also contributed to the market slump.
Against this backdrop, below we highlight a few ETFs that fetched sizable assets in December.
Both Stocks & Bonds Win
Vanguard Total Stock Market ETF (VTI - Free Report) amassed about $2.344 billion in Assets in the month whileiShares Core U.S. Aggregate Bond ETF (AGG - Free Report) andVanguard Total Bond Market ETF (BND) hauled in about $2.87 billion and $2.15 billion in assets, respectively in the month.
The benchmark U.S. treasury yield started the month at 3.53% while it ended the month at 3.88%. The yields seem pretty moderate given 4%+ yields recorded in 2022. As a result, both stocks and bonds probably have fetched investors’ attention.
Both Growth & Value ETFs Gain
iShares Russell 1000 Growth ETF (IWF - Free Report) and Vanguard Value ETF (VTV - Free Report) fetched about $ 1.78 billion and $1.45 billion in assets in December, respectively. While moderate rates and a likelihood of slower Fed rate hikes in 2023 favored growth ETFs, value ETFs too gained assets because a stubbornly-high-rate-environment still prevails.
S&P 500 & Nasdaq-100 Fall Out of Favor
SPDR S&P 500 ETF Trust (SPY - Free Report) , iShares Core S&P 500 ETF (IVV - Free Report) and Invesco QQQ Trust (QQQ - Free Report) lost about $3.47 billion, $2.95 billion and $2.55 billion in assets, respectively.
TIPS ETFs Underperform Too
iShares TIPS Bond ETF (TIP - Free Report) lost about $1.51 billion in assets. As inflation showed signs of easing, investors probably are not finding it a great bet right now. 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. Vanguard Short-Term Inflation-Protected Securities ETF (VTIP - Free Report) too lost about $845.6 million in assets.
Short-Term Bond ETFs Fall 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 1-3 Year Treasury Bond ETF (SHY - Free Report) lost assets worth $1.12 billion. PIMCO Enhanced Short Maturity Active ETF (MINT - Free Report) and Vanguard Short-Term Corporate Bond ETF (VCSH) saw about $843.4 million and $777.4 million in assets gushing out of the funds.
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ETF Asset Report of December
Wall Street was downbeat in December with muted Santa Clause Rally. The S&P 500 was off 5.7%, the Dow Jones has lost 3.7%, the Nasdaq Composite has retreated about 8.7% and the Russell 2000 has fallen about 7% past month (as of Dec 30, 2022).
In fact, the month snapped two consecutive months of gains. While recession fears were triggered by the relentless market forecasts, rising COVID cases in China and the advent of a new sub-variant of Omicron Covid-19 virus also contributed to the market slump.
Against this backdrop, below we highlight a few ETFs that fetched sizable assets in December.
Both Stocks & Bonds Win
Vanguard Total Stock Market ETF (VTI - Free Report) amassed about $2.344 billion in Assets in the month whileiShares Core U.S. Aggregate Bond ETF (AGG - Free Report) andVanguard Total Bond Market ETF (BND) hauled in about $2.87 billion and $2.15 billion in assets, respectively in the month.
The benchmark U.S. treasury yield started the month at 3.53% while it ended the month at 3.88%. The yields seem pretty moderate given 4%+ yields recorded in 2022. As a result, both stocks and bonds probably have fetched investors’ attention.
Both Growth & Value ETFs Gain
iShares Russell 1000 Growth ETF (IWF - Free Report) and Vanguard Value ETF (VTV - Free Report) fetched about $ 1.78 billion and $1.45 billion in assets in December, respectively. While moderate rates and a likelihood of slower Fed rate hikes in 2023 favored growth ETFs, value ETFs too gained assets because a stubbornly-high-rate-environment still prevails.
S&P 500 & Nasdaq-100 Fall Out of Favor
SPDR S&P 500 ETF Trust (SPY - Free Report) , iShares Core S&P 500 ETF (IVV - Free Report) and Invesco QQQ Trust (QQQ - Free Report) lost about $3.47 billion, $2.95 billion and $2.55 billion in assets, respectively.
TIPS ETFs Underperform Too
iShares TIPS Bond ETF (TIP - Free Report) lost about $1.51 billion in assets. As inflation showed signs of easing, investors probably are not finding it a great bet right now. 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. Vanguard Short-Term Inflation-Protected Securities ETF (VTIP - Free Report) too lost about $845.6 million in assets.
Short-Term Bond ETFs Fall 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 1-3 Year Treasury Bond ETF (SHY - Free Report) lost assets worth $1.12 billion. PIMCO Enhanced Short Maturity Active ETF (MINT - Free Report) and Vanguard Short-Term Corporate Bond ETF (VCSH) saw about $843.4 million and $777.4 million in assets gushing out of the funds.