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October ETF Asset Scorecard

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The month of October was all about a sharp stock market crash on rising rate worries and trade war fears. Overall, the S&P 500 registered 6.9% loss in October, marking its worst monthly performance since September 2011 and tech stocks underwent their worst month since the 2008 recession.

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

S&P 500 Rules

Despite crashes, the S&P 500-based ETFs drew copious assets. iShares Core S&P 500 ETF (IVV - Free Report) topped the list with about $4.23 billion of monthly inflows. Another S&P 500-based ETF Vanguard S&P 500 ETF (VOO - Free Report) garnered assets worth of $2.07 billion. However, SPDR S&P 500 ETF (SPY - Free Report) lost about $4.97 billionprobably due to the fact it charges higher fees (0.09%) than the other two (0.04%).

Communication at a Sweet Spot

The communication services sector has been newly minted and is the extended version of the old telecommunication sector.It has a lot of growth potential andhas now become riskier and cyclical with a new look.

According to the State Street, the regrouping of companies in the new sector is expected to generate more than $30 billion in market activity, indicating potential upside for Communication Services Select Sector SPDR Fund (XLC). So, the fund attracted about $2.04 billion in assets.

Japan ETFs on a Tear Too

In terms of assets, iShares MSCI Japan ETF (EWJ - Free Report) took the fourth spot with about $1.72 billion of inflows. The market saw resurgence in investors’ interest of late, after months of outflows. The uptick in interest was noticed after the Nikkei 225 Stock Average jumped to a 27-year high in early October, while the yen dived to its weakest level against the dollar since November.

Short-term Treasury ETFs Popular Among Investors

Since these have very low duration, these are less susceptible to rising rate worries. Real returns of cash alternatives are improving. Yields on short-term Treasury bills outdo U.S. inflation, meaning investors can now have real, inflation-adjusted returns from cash for the first time in a decade, per Financial Times.

So, SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL - Free Report) and JPMorgan Ultra-Short Income ETF (JPST - Free Report) added about $1.71 billion and $888.2 million in assets (read: Is Cash the Best Asset Right Now? ETFs in Focus).

Long-term Bonds Fell Flat

Needless to say, longer-duration funds are more susceptible to rising rate concerns. So, investors dumped iShares Core U.S. Aggregate Bond ETF (AGG - Free Report) , iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD - Free Report) , SPDR Bloomberg Barclays High Yield Bond ETF (JNK - Free Report) and iShares 20+ Year Treasury Bond ETF (TLT - Free Report) , which saw about $2.64 billion,$2.07 billion, $2.06 billion and $1.68 billion of assets gushing out, respectively.

Technology Not on Investors’ Radar

Overvaluation concerns and rising rates were killjoys for the segment. Technology Select Sector SPDR Fund (XLK - Free Report) shed around $1.02 billion in the month.

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