5 ETFs That Saw Capital Inflows Last Week

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Overall, ETFs pulled out $5.3 billion in capital in the week ended Feb 10. U.S. fixed income led the way with $3.3 billion in outflows, closely followed by $2.3 billion in U.S. equity ETFs, per etf.com. However, International equity ETFs and international fixed-income ETFs saw inflows of $790.3 million and $503.4 million, respectively.

As such, Invesco QQQ Trust (QQQ - Free Report), First Trust Financials AlphaDEX Fund (FXO - Free Report), Invesco KBW Bank ETF (KBWB - Free Report), iShares Core U.S. Aggregate Bond ETF (AGG - Free Report) and Schwab U.S. Dividend Equity ETF (SCHD - Free Report) dominated the top creation list last week.

The lackluster performance came as U.S. stocks logged in the steepest losses since mid-December last week. The S&P dipped 1.1%, while the Nasdaq slumped 2.4%. A round of weak quarterly earnings reports and concerns about the Fed’s plan to continue increasing interest rates took a toll on investors’ sentiment.

Meanwhile, U.S. Treasury yields continued their climb and the yield curve has inverted (in which short rates are higher than longer rates) sharply since early 1980s, triggering fresh worries about economic troubles. Notably, inversions tend to precede a recession.

Further, the earnings picture so far appears to be weak and points to a recession. Earnings from the S&P 500 companies that have reported results so far are down 6.7% from the same period last year on 5.7% higher revenues, with 71.0% beating EPS estimates and 69.0% beating revenue estimates. The growth pace for both earnings and revenues represents a notable deceleration from the trend seen in other recent periods.

We have given details of the ETFs below:

Invesco QQQ Trust (QQQ)

Invesco QQQ topped asset flow creation last week, gathering $908.1 million in capital. QQQ provides exposure to the 101 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 6.3% of assets. The product is also heavily tilted toward information technology at 50.4%, while communication services and consumer discretionary 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 $161.3 billion and an average daily volume of 46 million shares. QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

First Trust Financials AlphaDEX Fund (FXO)

First Trust Financials AlphaDEX Fund pulled in $725 million in capital, bringing the AUM to $2 billion. It targets the broad financials sector and follows the StrataQuant Financials Index, which employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index. Holding 101 stocks in its basket, the ETF charges 62 bps in annual fees.

First Trust Financials AlphaDEX Fund trades in an average daily volume of 546,000 shares and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

Invesco KBW Bank ETF (KBWB)

Invesco KBW Bank ETF gathered $603.2 million in capital. It provides exposure to the 26 large national U.S. money centers, regional banks and thrift institutions that are publicly traded in the United States. It follows the KBW Nasdaq Bank Index. Invesco KBW Bank ETF concentrates on the top five firms that make up at least 7% share each.

Invesco KBW Bank ETF has managed $2.5 billion in its asset base and trades in a solid volume of 807,000 shares per day on average. The expense ratio comes in at 0.35%. KBWB has a Zacks ETF Rank #2 with a High risk outlook.

iShares Core U.S. Aggregate Bond ETF (AGG)

iShares Core U.S. Aggregate Bond ETF saw an inflow of $436.2 million last week. It offers broad exposure to U.S. investment-grade bonds by tracking the Bloomberg US Aggregate Bond Index. iShares Core U.S. Aggregate Bond ETF holds 10,713 securities in its basket with an average maturity of 8.70 years and an effective duration of 6.39 years.

iShares Core U.S. Aggregate Bond ETF has AUM of $85.8 billion and an average daily volume of 8 million shares. It charges 3 bps in annual fee.

Schwab U.S. Dividend Equity ETF (SCHD)

Schwab U.S. Dividend Equity ETF gathered about $403.9 billion in its asset. It offers exposure to 103 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. Schwab U.S. Dividend Equity ETF is well spread across components, with none holding more than 4.5% of the assets. It charges 6 bps in annual fees and trades in a solid volume of about 3.3 million shares a day.

Schwab U.S. Dividend Equity ETF has AUM of $47 billion and a Zacks ETF Rank #3 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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