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ETF Asset Report of September

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The month of September was a mixed bag for Wall Street. Though trade tensions between the United States and China escalated and the Fed hiked interest rates for the third time this year, the moves were largely anticipated and priced in at the current level. Thus, there were no wild movements in the market as such.

Let’s delve a little deeper and see which ETF areas raked in the maximum in the month and which ones lost the most.

S&P 500 Rules

Since the U.S. markets held their ground in the month and the S&P 500 performed well, SPDR S&P 500 ETF (SPY - Free Report) topped the list with about $5.15 billion of monthly inflows. Another S&P 500-based ETF Vanguard S&P 500 ETF (VOO - Free Report) garnered assets worth of $4.47 billion.

Investors Poured Funds in U.S. Treasuries

U.S. treasury ETFiShares 20+ Year Treasury Bond ETF (TLT - Free Report) hauled in about $2.43 billion in the month. In an uncertain environment riddled with rising rate concerns and trade war between the United States and China, investors targeted safe-haven TLT. The fund has attracted about $2.43 billion in the month (read: Fed Hikes Rates as Expected: ETF Areas That Gained).

Small-Caps Gained Too

The small-cap ETFiShares Russell 2000 ETF (IWM - Free Report) attracted about $2.37 billion. Small-cap stocks are likely to do better in a rising rate environment (which currently is the case) since these are more tied to domestic activities and are thus not hurt by a rising dollar. Economic wellbeing in the domestic land is also a major positive for small-cap stocks (read: Small-Cap ETFs in Focus on Trade Woes, Solid Economic Data).

Newly-Minted Communication Sector Becomes Investors’ Favorite

Communication Services Select Sector SPDR Fund (XLC - Free Report) raked in about $1.36 billion in assets in September. The sector has been newly minted and has widened the exposure from the old telecommunication sector. Since high-growth tech and media stocks have been added to this new sector, making it the biggest change in Wall Street's broad sectors since 1999, the sector has now become more growth-oriented than value-focused and holds huge potential (read: Big Tech Sector Shake-Up Put These Stocks and ETFs in Focus).

High-Yield Bonds: A Loser

iShares iBoxx USD High Yield Corporate Bond ETF (HYG - Free Report) , which yields about 5.08% annually, saw about the outflow of $2.43 billion in assets. High-yield bonds fell out of investors’ favor owing to rising rates. Investors should note that these bonds are junk in nature and have higher default risks, compelling investors to dump them.

International Economies Not on Investors’ Radar

Though international economies have been showing signs of improvement, trade tensions and a stronger greenback have been killjoys for the segment. iShares MSCI EAFE ETF (EFA - Free Report) lost about $1.73 billion andiShares MSCI Japan ETF (EWJ - Free Report) shed around $737.5 million in the month.  

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