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January ETF Asset Report: U.S. Equities Win

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The S&P 500 and the Dow Jones lost 0.04% and 0.9%, respectively, last month. Meanwhile, the Nasdaq advanced about 3%. Geopolitical tensions in the Middle East, the signing of the phase-one trade deal between the United States and China and the coronavirus outbreak regulated the ETF world in the month.

While stocks saw a soft start and end to the month, mid-January was favorable for the markets due to the signing of the trade deal. Let’s delve a little deeper.

U.S. Equities Top

The S&P 500 reached a fresh high in mid-January. In fact, there was a broad-based rally in the market following the signing of the trade deal. No wonder, Vanguard Total Stock Market ETF (VTI - Free Report)  accumulated about $2.57 billion in assets in the month.

S&P 500-based ETFs like iShares Core S&P 500 ETF (IVV - Free Report) and Vanguard S&P 500 ETF (VOO - Free Report) hauled in $2.08 billion and $2.00 billion in assets, respectively. Not only large caps, small-caps also garnered sizable assets. Vanguard Small-Cap ETF VB attracted about $1.58 billion in assets (read: S&P 500 Up 1000 Points in a Month: 10 Stocks Boosted the ETF).

Developed Markets Stayed Steady

While the virus scare mainly hit China and the broader emerging markets, developed markets were less ruffled. Probably that is the reason why investors poured in about $2.05 billion in assets in iShares Core MSCI EAFE ETF (IEFA - Free Report) .

Bonds: Investors’ Darling

Geopolitical issues and the coronavirus panic boosted safe-haven assets in January. iShares Core U.S. Aggregate Bond ETF (AGG - Free Report) and Vanguard Total Bond Market ETF (BND - Free Report) amassed about $2.00 billion and $1.94 billion in assets, respectively. Corporate bonds were steady too with Vanguard Intermediate-Term Corporate Bond ETF (VCIT - Free Report) gatheringabout $1.74 billion in the month (read: Play These Bond ETFs to Keep the Coronavirus Fear at Bay).

Nasdaq-100 ETF Out of Favor

Surprisingly, investors dumped their otherwise favorite bet Invesco QQQ Trust (QQQ - Free Report) , which saw outflows of $1.32 billion in the month. The Nasdaq-100 is tech heavy and the sector has considerable exposure to coronavirus-infected China. This explains why investing world got shaky about the apparent-tech ETF.

Short-Term Treasury Bled Assets

Flattening of the yield curve was a prominent feature in January. While the benchmark 10-year U.S. treasury yield slumped from 1.88% to 1.51% in January, two-month treasury bond yields rose from 1.55% to 1.57%.

This made short-term treasury investing less attractive. And investors dumped funds like Vanguard Short-Term Corporate Bond ETF (VCSH - Free Report) and iShares 1-3 Year Treasury Bond ETF (SHY - Free Report) . Both funds saw the loss of about $1.21 billion and $712 million in assets.  

Junk-Bonds Underperform

Investors steered clear of junk bond ETFs like iShares iBoxx USD High Yield Corporate Bond ETF (HYG - Free Report) and SPDR Bloomberg Barclays High Yield Bond ETF (JNK - Free Report) , heading for high-investment grade products. Both funds lost about $1.13 billion and $1.05 billion in assets, respectively. The final days of January marked the largest withdrawal from junk bonds since the week ended on Aug 7.

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