Regular ETFs That Swell In Assets Amid Rising Rate Worries
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Wall Street has been downbeat in recent weeks. This happened on the likelihood of faster monetary policy tightening by the Federal Reserve. St. Louis Fed President James Bullard said this month that he seeks rising rates by 3% to 3.25% in the second half of 2022, while Chicago Fed President Charles Evans and his Atlanta counterpart Raphael Bostic said they favor raising rates to neutral.
The data revealing the conditions of the job market came in as strong enough to endure faster rate increases. Inflation has been red-hot. As a result, bond yields rose. The benchmark U.S. Treasury yield jumped to 2.83% on Apr 14, 2022, from 2.39% recorded at the start of the month.
Against this backdrop, below we highlight a few ETFs that amassed immense assets last week.
S&P 500
iShares Core S&P 500 ETF (IVV - Free Report) -- $5.53 Billion
Per new data from FactSet, analysts had the most Buy ratings during February and March in more than a decade on stocks on the S&P 500 as a percentage of their total ratings. Of 10,821 ratings on companies tracked by the benchmark, 57.3% had an investment analyst recommendation of Buy as of Mar 31, slightly trailing February at 57.4%. The lion’s share of these Buy ratings went to Energy, Information Technology and Communication Services. This has probably helped IVV to swell in assets.
Bonds
iShares 20+ Year Treasury Bond ETF (TLT - Free Report) -- $3.95 Billion
Vanguard Total Bond Market ETF (BND - Free Report) – $3.30 Billion
The bond market too has seen influx of assets. TLT yields 1.84% annually while BND yields 2.32% annually; both fell behind the benchmark treasury yields. The rising rate scenario is negative for the bond investing. The rise in assets could be due to an increase in short-selling pressure.
Emerging Markets
iShares MSCI Emerging Markets ETF (EEM - Free Report) -- $2.86 Billion
iShares Core MSCI Emerging Markets ETF (IEMG - Free Report) -- $2.76 Billion
Emerging economies are commodity-rich. Since the commodity market is on a tear lately, emerging market stocks had a reason to soar. Meanwhile, the greenback has been range-bound despite the rising rate worries in the United States. In fact, EEM has beaten the S&P 500 by return past month.
Total Stock Market
Vanguard Total Stock Market ETF (VTI - Free Report) -- $2.65 Billion
The total stock market has also hauled in considerable assets last month. Dirt-cheap valuation amid the war-induced selloff (between Russia and Ukraine), probably has led investors toward the total stock market.
Gold Bullion
SPDR Gold Trust (GLD - Free Report) -- $2.54 Billion
Gold investing has been in the sweet spot this year. The safe-haven demand emanated from the Russian war brightened the appeal for the yellow metal. Plus, gold is viewed as an inflation-beating asset. Sky-high inflation is also driving investors toward this precious metal.
Healthcare
Health Care Select Sector SPDR Fund (XLV - Free Report) -- $1.88 Billion
The healthcare sector is a good defensive investment option. Currently, the Russia-Ukraine war crisis and the Fed’s hawkish stance on rate hikes made the investing world jittery, making the healthcare sector a safe bet. Plus, the pandemic also triggered a race to introduce vaccines, tests, and treatment options, placing the healthcare sector in a sweet spot.
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