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ETF Asset Report in January: International Tops

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The year 2023 recorded the best January in four years. The S&P 500 (up 5.6%), the Dow Jones (up 2%), the Nasdaq Composite (up 10.3%) and the Russell 2000 (up 8.4%) – all gained handsomely past month (as of Jan 30, 2023).

Hopes of smaller interest rate hikes, thanks to a decline in inflation, renewed investors’ risk-on trading. The U.S. benchmark treasury yields marked a meaningful decline in January. The benchmark U.S. treasury yield started the year at 3.79% and stood at 3.55% on Jan 30, 2023.

Overall, the S&P 500, the Dow Jones, the Nasdaq and the Russell 2000 gained 8.5%, 7.6%, 9% and 5.5%, respectively, past month (as of Jan 30, 2023).

International ETFs Top Asset Generation

JPMorgan BetaBuilders Europe ETF (BBEU - Free Report) andiShares Core MSCI Emerging Markets ETF (IEMG - Free Report) have amassed about $3.47 billion and $3.17 billion in assets, respectively, in January. Not only equity ETFs, emerging market bond ETF iShares JP Morgan USD Emerging Markets Bond ETF EMB has also fetched about $2.40 billion in January (read: Time for Emerging Markets ETFs?).

EM investing has been gaining prominence to start 2023. Stocks in emerging markets are set to be this decade’s winners, said Morgan Stanley Investment Management, per Bloomberg, as quoted on Yahoo Finance. Emerging economies on average are expected to grow 4.1% in 2023 and 4.4% in 2024, according to estimates on Bloomberg. That’s way higher than the estimates for the United States, at 0.5% and 1.2%, respectively.

Corporate Bond ETF Manage Solid Asset Generation

iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD - Free Report) has amassed about $3.65 billion in assets. The LQD yields 3.16% annually and charges 14 bps in fees. As rates dived, corporate bond investing has gained strength. This is especially true given corporate earnings have come in less downbeat than expected this season. Plus, as risk-on sentiments returned in the market, investors started betting big on corporate bond ETFs. iShares iBoxx USD High Yield Corporate Bond ETF (HYG - Free Report) has also hauled in about $2.37 billion in assets in the month.

Dividend ETF Winner Too

SPDR S&P Dividend ETF (SDY - Free Report) has gathered about $2.03 billion in assets in January. The demand for dividend investing is always in vogue as this offers quality exposure. The fund bet on stocks that have been consistently increasing dividends every year for at least 20 consecutive years. The fund SDY yields 2.51% annually and charges 35 bps in fees.

U.S. Equity ETFs Underperform

Nasdaq-100 ETFInvesco QQQ Trust (QQQ - Free Report) , iShares Russell 1000 Growth ETF (IWF - Free Report) , iShares Russell 1000 Value ETF (IWD - Free Report) and iShares Russell 2000 ETF (IWM - Free Report) have lost about $3.79 billion, $3.15 billion, $3.0 billion and $2.14 billion in assets, respectively, in the month. ProShares UltraPro QQQ (TQQQ) too shed about $1.52 billion in assets in the month.

Low-Volatility EM too Out of Favor

iShares MSCI Emerging Markets Min Vol Factor ETF (EEMV - Free Report) lost about $1.75 billion in assets in the month as minimum volatility product in the EM segment is probably not in demand.

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