Five ETFs Most Loved By Investors Last Week

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The U.S. stock market witnessed volatility last week with the S&P 500 and the Dow Jones hitting new highs and then retreating. The S&P 500 touched new highs, just below the 4,000 level while the Dow Jones topped 33,000 early last week.

Faster vaccine deployment, continued progress in more vaccines, and the new $1.9 trillion stimulus passed by President Joe Biden continued to bolster investors’ confidence. Additionally, the Fed in its latest meeting maintained interest rate near zero with no interest rate hikes through 2023. The central bank projects a rapid jump in U.S. economic growth and inflation this year as the COVID-19 crisis winds down. This combination of factors will continue to push the stocks higher.

However, rising yields took a toll on high-growth stocks, especially tech as the sector relies on easy borrowing for superior growth and its value depends heavily on future earnings. A rise in long-term yields lowers the present value of companies’ future earnings. Additionally, the Fed declined to extend a temporary capital buffer relief put in place to ease the pandemic-led stress in the funding market. The rule is expiring at the end of the month and has relaxed the supplementary leverage ratio for banks amid the pandemic. The move has pushed down the bank stocks lower.

In such a scenario, investors continue to rotate to small-cap and value stocks while dumping the high-growth and high-beta sectors. As a result, the Dow Jones and S&P 500 broke their two-week winning streak while the tech-heavy Nasdaq Composite Index recorded it fourth negative week in five. All the three indices lost no more than 0.8% last week.

Overall, ETFs gathered about $71 billion capital last week, bringing in year-to-date inflows of $252.5 billion, more than triple the $70.7 billion seen in the year-ago period. U.S. equity ETFs led the way higher last week with $60.3 billion inflows, closely followed by $6.7 billion in international equity ETFs, per etf.com.

As such, a few ETFs garnered solid investor interest last week and will continue to be their darlings should the current market trends prevail. Below we have highlighted five of them:

Vanguard Dividend Appreciation ETF (VIG Quick Quote VIG - Free Report)

VIG has been one of the most-popular ETFs of last week, gathering $12.6 billion in the capital. This is the largest and the most popular ETF in the dividend space with AUM of $67.3 billion. The fund follows the NASDAQ US Dividend Achievers Select Index, which is composed of high-quality stocks that have a record of raising dividends every year. It holds 212 securities in the basket with none accounting for more than 4.6% share. The fund charges 6 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

Schwab U.S. Dividend Equity ETF (SCHD Quick Quote SCHD - Free Report)

SCHD has accumulated around $5.2 billion in its asset base last week. With AUM of $25.6 billion, this product offers exposure to 101 high-dividend yielding U.S. companies that have a record of consistent dividend payments supported by fundamental strength based on financial ratios and ample liquidity. This can be easily done by tracking the Dow Jones U.S. Dividend 100 Index. The fund is well spread across components, with none holding more than 4.8% of assets. It charges 6 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

Vanguard Mid-Cap ETF (VO Quick Quote VO - Free Report)

This fund gathered $3.6 billion in the capital last month, taking its total AUM to $49.7 billion. It targets the mid-cap segment of the broad stock market and tracks the CRSP US Mid Cap Index. The fund holds 349 stocks with a well-diversified portfolio as each firm holds no more than 1% of the total assets. The product charges investors 4 bps in fees per year and has a Zacks ETF Rank #2 with a Medium risk outlook.

Vanguard Small-Cap ETF (VB Quick Quote VB - Free Report)

This fund, which targets the small-cap segment, saw inflows of $2.6 billion. It follows the CRSP US Small Cap Index and holds a basket of 1442 stocks with none holding more than 0.5% of assets. The ETF is popular with AUM of $47.2 billion and trades in a solid average daily volume of about 860,000 shares. VB is one of the low-cost choices, charging just 5 bps in fees per year from investors. It has a Zacks ETF Rank #2 with a Medium risk outlook.

Vanguard Extended Market ETF (VXF Quick Quote VXF - Free Report)

This ETF has accumulated about $1.8 billion last week, bringing its total AUM to $17.8 billion. It follows the S&P Completion Index, which contains all of the U.S. common stocks regularly traded on the New York Stock Exchange and the Nasdaq over-the-counter market, except those stocks included on the S&P 500 Index. The fund is home to 3371 stocks with each accounting for no more than 1.2% share. It charges 6 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.

Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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