Daily Stock Market Reports

5 Hot ETFs of 2021 Driving Global Inflows to Record $1T


Amid the skyrocketing stock market, the global ETF industry is booming, breaking new records in terms of inflows. Investors have poured more than a trillion-dollar cash for the first time into ETFs this year through the end of November, surpassing last year’s inflows of $735.7 billion, per Morningstar. This has pushed global ETF assets close to $9.5 trillion, more than twice the value at the end of 2018.

According to ETFGI, ETFs and ETPs listed globally have pulled in a record $1.14 trillion in net inflows in the first 11 months of 2021. About $788.9 billion of the total inflows came from equity ETFs, followed by $211.1 billion inflows in fixed income. Vanguard S&P 500 ETF VOO, Vanguard Total Stock Market ETF VTI, iShares Core S&P 500 ETF IVV, Invesco QQQ Trust QQQ and SPDR S&P 500 ETF Trust SPY are leading the asset flow list this year.

The record inflows in ETFs are driven by the rising stock market and a lack of high-yielding alternatives. The low-cost passively managed U.S. funds that track indexes run by Vanguard Group, BlackRock and State Street, which together control more than 75% of all U.S. ETF assets, have been the biggest money pullers this year. Passively managed funds are attractive courtesy of their unique strategies, creativity, transparency, diversification benefits, enhanced tax competencies, low turnover and, of course, low cost.

Additionally, new actively managed fund launches in the space with narrow themes or unfilled niche market have driven the demand. More than half of the record 380 ETFs launched in the U.S. this year are actively managed, according to FactSet. Further, ETFs that hold inflation-protected bonds are also enjoying a surge in investor interest due to the rise in inflation. However, these still represent a small proportion of the total inflows (read: 5 ETFs Benefiting From High Inflation).

The global ETF/ETP industry had 9,700 products, with 19,606 listings and AUM of $9.92 trillion from 596 providers listed on 79 exchanges in 62 countries at the end of November.

Let’s delve into the five ETFs in detail below:

Vanguard S&P 500 ETF (VOO)

Vanguard S&P 500 ETF has accumulated $48.4 billion in capital. It tracks the S&P 500 Index and holds 512 stocks in its basket, each accounting for more than 6.6% of assets. Vanguard S&P 500 ETF is heavy on the information technology sector while consumer discretionary, healthcare, financials and communication services round off its next four spots with a double-digit allocation each.

Vanguard S&P 500 ETF charges investors 3 bps in annual fees and trades in an average daily volume of 4.5 million shares. It has AUM of $272.3 billion and a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Forget Omicron: Tap S&P 500 ETFs for At Least 6% Gains in 2022).

Vanguard Total Stock Market ETF (VTI)

Vanguard Total Stock Market ETF has gathered $38.9 billion in capital, taking its total AUM to $294.1 billion. 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 4,156 stocks with key holdings in technology, consumer discretionary, industrials, healthcare and financials.

Vanguard Total Stock Market ETF charges 3 bps in fees per year from investors and trades in an average daily volume 3.3 million shares. VTI has a Zacks ETF Rank #2 with a Medium risk outlook.

iShares Core S&P 500 ETF (IVV)

iShares Core S&P 500 ETF has pulled in $26.5 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket, each accounting for no more than 7% of assets. IVV is heavy on the information technology sector, while healthcare, consumer discretionary, financials and communication round off its next four spots with a double-digit allocation each.

iShares Core S&P 500 ETF charges investors 3 bps in annual fees and trades in an average daily volume of 4.1 million shares. It has AUM of $333.8 billion and a Zacks ETF Rank #2 with a Medium risk outlook.

Invesco QQQ Trust (QQQ)

Invesco QQQ gathered about $17.8 billion in its asset base last week. QQQ provides exposure to the 102 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Invesco QQQ is heavily concentrated on the top two firms with a double-digit allocation, while other firms hold no more than 7.4% of assets. The product is also heavily tilted toward information technology at 51.4%, while communication services and consumer discretionary round off the next two spots (read: 5 Tech Stocks That Led the Nasdaq ETF Rally).

Invesco QQQ is one of the largest and most popular ETFs in the large-cap space, with AUM of $209.9 billion and an average daily volume of 41.7 million shares. QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.

SPDR S&P 500 ETF Trust (SPY)

SPDR S&P 500 ETF Trust topped asset flow creation last week, gathering $15 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket, each accounting for no more than 7% of assets. SPDR S&P 500 ETF Trust is heavy on the information technology sector, while healthcare, consumer discretionary, financials and communication services round off the next four spots with a double-digit allocation each.

SPDR S&P 500 ETF Trust charges investors 9 bps in annual fees and trades in an average daily volume of 60.4 million shares. It has AUM of $437.7 billion and a Zacks ETF Rank #2 with a Medium risk outlook.

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Invesco QQQ (QQQ): ETF Research Reports
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
Vanguard Total Stock Market ETF (VTI): ETF Research Reports
 
Vanguard S&P 500 ETF (VOO): ETF Research Reports
 
iShares Core S&P 500 ETF (IVV): ETF Research Reports
 
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