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ETF Asset Report of May

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The month of May was all about the gradual reopening of global economies and relentless research on coronavirus vaccines as well as some positive outcomes on it. Moderate corporate earnings have also led to market strength.  The energy market staged a comeback too. Key U.S. indexes were in the green in the month. In this scenario, we highlight ETF asset flows for the month of May.

High-Yield Bond ETFs Top

Risk-on sentiments and the Fed’s monetary favor are working wonders for the segment.In mid-April, the Fed said it would expand its bond-buying program to include debt that was investment-grade rated as of Mar 22 but was later downgraded to no lower than BB-, or three levels into high yield. The very move made iShares iBoxx USD High Yield Corporate Bond ETF (HYG - Free Report) appealing and it added about $4.38 billion in assets in May. SPDR Bloomberg Barclays High Yield Bond ETF (JNK - Free Report) attracted about $1.36 billion in May (read: Fed Goes the Extra Mile: 6 ETF Areas to Win).

Gold Glitters

Gold bullion ETF SPDR Gold Trust (GLD - Free Report) saw inflows of $3.48 billion in the month. While a safe-haven rally amid the coronavirus fear increased the lure for gold, moderate strength in the greenback thanks to Fed policy easing continued to help the yellow metal. The metal bullion gained 2.6% past month.

Investment-Grade Corporate Bond ETFs in High Favor

After its crisis-era policy launch, the Fed announced a fresh set of stimuli on Mar 23. The Fed added that the purchases of Treasury and mortgage securities are unlimited. Among other steps, the Fed confirmed it would buy investment-grade corporate bond ETFs for the first time. However, the Fed cannot own more than 20% of any one ETF or 10% of individual corporate bonds. Because of this move, iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD - Free Report) continued adding assets in the last few months, with $2.25 billion being attached to it in May.

Not only LQD, Vanguard Total Bond Market ETF (BND - Free Report) , Vanguard Short-Term Corporate Bond ETF (VCSH - Free Report) , and Vanguard Intermediate-Term Corporate Bond ETF (VCIT - Free Report) also added assets $1.67 billion, $1.57 billion and $1.24 billion, respectively, in the month.

Tech Rules

Though economies started to reopen, investors kept on pouring money in tech-driven ETFs as the area is going to rule the post-coronavirus world due to growing trend of work and learn from home. Tech heavy Invesco QQQ Trust (QQQ - Free Report) (based on the Nasdaq-100 index) and Vanguard Information Technology ETF (VGT - Free Report) amassed about $3.44 billion and $1.35 billion, respectively.

S&P 500 Loses

BothSPDR S&P 500 ETF Trust (SPY - Free Report) and iShares Core S&P 500 ETF (IVV - Free Report) lost about $6.14 billion and $1.51 billion in assets, respectively. Investors preferred the Nasdaq to S&P 500.

Emerging Markets Fell Out of Investors’ Favor

iShares Core MSCI Emerging Markets ETF (IEMG - Free Report) shed about $1 billion in assets in May on fears of a struggle with economic crisis that this space may face in the coming days amid coronavirus crisis.

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