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ETFs across various categories pulled in $17.7 billion in capital last week, pushing year-to-date inflows to more than $27 billion. U.S. fixed-income ETFs led the way with inflows of $7.2 billion, followed by inflows of $5.9 billion in U.S. equity ETFs and $1.9 billion in international fixed-income ETFs.
Vanguard S&P 500 ETF VOO, Vanguard Large Cap ETF VV, iShares 20+ Year Treasury Bond ETF TLT, Vanguard Total Stock Market ETF VTI and BlackRock's iShares Bitcoin Trust IBIT dominated the top creation list last week.
The S&P 500, Dow Jones Industrial Average and the Nasdaq Composite wrapped up the second consecutive weekly decline. The domestically focused small-cap Russell 2000 index slipped into correction territory, declining 10.4% from its Nov. 25 peak.
Inflation fears, uncertainty surrounding future Fed rate cuts and ambiguity over Trump’s tariff policies took a toll on the stock market. The blockbuster jobs data sparked fears of inflation and cast doubt on further interest rate cuts. The United States added better-than-expected 256,000 jobs in December and unemployment dropped to 4.1% from 4.2% in November.
A surge in Treasury yields also weighed on the stock market as higher yields increased borrowing costs for companies and households. The 10-year yields spiked to the highest level since late 2023. Additionally, uncertainties surrounding President-elect Donald Trump’s potential approach to imposing higher tariffs on China and other nations have heightened investor caution, particularly with the Jan. 20 inauguration just days away (read: Inverse Treasury ETFs Rallying on Spike in Yields).
Declining consumer sentiment at the start of the new year also added to the chaos. This signals concern on the inflation front. A University of Michigan survey showed that consumer sentiment dropped to 73.2 in January from 74 in December.
We have detailed the ETFs below:
Vanguard S&P 500 ETF (VOO)
Vanguard S&P 500 ETF is the top asset creator, pulling in $6.6 billion in capital. It tracks the S&P 500 Index and holds 504 stocks in its basket, each accounting for no more than 7.1% of the assets. Vanguard S&P 500 ETF is heavy on the information technology sector, while financials, consumer discretionary and healthcare round off the next three spots with a double-digit allocation each.
Vanguard S&P 500 ETF charges investors 3 bps in annual fees. It has AUM of $595.7 billion and trades in average daily volume of 4.6 million shares. VOO has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: 5 Most-Loved ETFs of 2024).
Vanguard Large Cap ETF (VV)
Vanguard Large Cap ETF has accumulated $1.7 billion in its asset base. It tracks the CRSP US Large Cap Index and holds 493 stocks in its basket, with each accounting for no more than 6.7% of the assets. SPDR S&P 500 ETF Trust is heavy on the information technology sector with a 36% share, while consumer discretionary, industrials, financials, and healthcare round off the next four spots with a double-digit allocation each.
Vanguard Large Cap ETF charges investors 4 bps in annual fees and trades in an average daily volume of 235,000 shares. It has an AUM of $41.1 billion and a Zacks ETF Rank #1 with a Medium risk outlook.
iShares 20+ Year Treasury Bond ETF (TLT)
iShares 20+ Year Treasury Bond ETF has gathered $1.5 billion in its asset base. It provides exposure to long-term Treasury bonds by tracking the ICE U.S. Treasury 20+ Years Bond Index. iShares 20+ Year Treasury Bond ETF holds 46 securities in its basket and charges 15 bps in annual fees. It has an average maturity of 25.77 years and an effective duration of 15.88 years.
TLT is one of the most popular and liquid ETFs in the bond space, with an AUM of $50.3 billion and an average daily volume of 37 million shares. iShares 20+ Year Treasury Bond ETF has a Zacks ETF Rank #4 (Sell) with a High risk outlook
Vanguard Total Stock Market ETF (VTI)
Vanguard Total Stock Market ETF has accumulated $1.2 billion in capital. It provides exposure to the broader stock market by tracking the CRSP US Total Market Index. Vanguard Total Stock Market ETF holds a large basket of well-diversified 3,624 stocks with key holdings in technology, consumer discretionary, industrials, financials and healthcare.
Vanguard Total Stock Market ETF charges 3 bps in fees per year from investors and trades in an average daily volume of 3 million shares. VTI has amassed $461.2 billion in its asset base and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
iShares Bitcoin Trust (IBIT)
iShares Bitcoin Trust raked in $934.2 billion in capital last week. It seeks to reflect the performance of the price of Bitcoin. It enables investors to access Bitcoin within a traditional brokerage account. The fund charges 25 bps in annual fees from investors. IBIT has AUM of $52.5 billion and trades in an average daily volume of 51 million shares (read: Bitcoin ETFs Soar in 2024, Structured Protection ETFs in the Cards?).