5 ETFs That Investors Loved Last Week Amid Market Turmoil

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Last week, ETFs shed about $14 billion in capital, pushing year-to-date inflows to $395.8 billion. U.S. equity ETFs led the way higher with $11.2 billion outflows, closely followed by outflows of $1.3 billion in U.S. fixed-income ETFs and $223.7 million in international equity, per etf.com.

Despite the capital outflows, iShares Core S&P Total U.S. Stock Market ETF (ITOT - Free Report), iShares Russell 2000 ETF (IWM - Free Report), iShares 1-3 Year Treasury Bond ETF (SHY - Free Report), Invesco QQQ Trust (QQQ - Free Report), and SPDR Bloomberg 1-3 Month T-Bill ETF (BIL - Free Report) dominated the top creation list last week.

The outflows came amid the market turmoil. The three major bourses capped their fifth negative week in six, with the Dow Jones and the S&P 500 losing 4% and 4.6%, respectively. The tech-heavy Nasdaq Composite Index plunged 5.1% last week. The renewed selling pressure came after Fed Chair Jerome Powell raised interest rates by another 75 bps.

This marks the third consecutive rate hike of 0.75% and pushed the benchmark interest rate to 3.0-3.25%, the highest level since 2008. The central bank also signaled that additional large rate hikes were likely at upcoming meetings as it combats inflation, which remains near a 40-year high.

Fed officials now expect the federal funds rate at a range of 4.25% to 4.5%, a full percentage point above the 3.25% to 3.5% projected in June to end 2022. This means that the central bank could approve another three-quarter point hike at its November meeting and then a half-point rate rise in December. Economists warned that the rapid tightening would hurt the labor and housing markets, thereby pushing the economy into recession and impacting the stock market.

Meanwhile, the yield on 10-year Treasury notes jumped to a high of 3.64% last week, its highest level since February 2011, while the 2-year yield topped 4.1%, its highest level since 2007. As yields rise, returns of investors having big holdings in the fixed-income world are hurt. As such, bond investors might experience heavy losses, given that bond prices and yields have an inverse relationship.

We have detailed the ETFs below:

iShares Core S&P Total U.S. Stock Market ETF (ITOT)

iShares Core S&P Total U.S. Stock Market ETF topped asset flow creation last week, gathering $1.8 billion in capital. It offers exposure to the total U.S. stock market, ranging from some of the smallest to largest companies by tracking the S&P Total Market Index. ITOT is heavy on the information technology sector while healthcare, financials and consumer discretionary round off its next three spots with a double-digit allocation each.

iShares Core S&P Total U.S. Stock Market ETF charges investors 3 bps in annual fees and trades in an average daily volume of 2.3 million shares. It has AUM of $40.5 billion and a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

iShares Russell 2000 ETF (IWM)

iShares Russell 2000 ETF accumulated around $1.2 billion in its asset base last week. It is the largest and most popular ETF in the small-cap space, with AUM of $50.1 billion and an average daily volume of 21.1 million shares. iShares Russell 2000 ETF holds well-diversified 1,975 stocks in its basket and has key holdings in healthcare, financials, industrials, information technology and consumer discretionary.

iShares Russell 2000 ETF charges 19 bps in annual fees and trades in an average daily volume of 21.1 million shares. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook

iShares 1-3 Year Treasury Bond ETF (SHY)

iShares 1-3 Year Treasury Bond ETF accumulated about $1.1 billion last week, taking its total AUM to $26.9 billion. It offers diversified exposure to the short-term U.S. Treasury bonds by tracking the ICE US Treasury 1-3 Year Index.

Holding 85 securities in its basket, iShares 1-3 Year Treasury Bond ETF charges 15 bps in annual fees and trades in an average daily volume of 5.9 million shares. It has a Zacks ETF Rank #3 with a Medium risk outlook.

Invesco QQQ Trust (QQQ)

Invesco QQQ gathered about $917 million in its asset. 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 the other firms hold no more than 6.8% of assets. The product is also heavily tilted toward information technology at 49.6%, while consumer discretionary and communication services round off the next two spots.

Invesco QQQ is one of the largest and most popular ETFs in the large-cap space, with AUM of $153.8 billion and an average daily volume of 47.5 million shares. QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.

SPDR Bloomberg 1-3 Month T-Bill ETF (BIL)

SPDR Bloomberg 1-3 Month T-Bill ETF saw an inflow of $901 million last week. It seeks to provide exposure to zero-coupon U.S. Treasury securities with a remaining maturity of 1-3 months. It follows the Bloomberg 1-3 Month U.S. Treasury Bill Index, holding 14 securities in its basket. Both average maturity and adjusted duration come in at 0.10 years each.

SPDR Bloomberg 1-3 Month T-Bill ETF has AUM of $21.7 billion and an average daily volume of 5.5 million shares. It charges 14 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.


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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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