Last week, ETFs pulled in about $25 billion in capital, pushing year-to-date inflows to $409.4 billion. This marks a stark reversal from the prior two weeks, when ETFs shed $4.2 billion and $5.3 billion, respectively. U.S. equity ETFs led the way higher with $20.1 billion in inflows, closely followed by $3.6 billion in U.S. fixed-income ETFs and $1.3 billion in inverse ETFs.
As such, Vanguard Total Stock Market ETF VTI, Vanguard S&P 500 ETF VOO, Vanguard Extended Market ETF VXF, Vanguard Mid-Cap ETF VO and Vanguard Small-Cap ETF VB dominated the top creation list last week.
The inflows came despite the slump in the stock market last week. Wall Street wrapped up the worst week since June. The S&P 500 plunged 4.8%, its worst week since the five days ended Jun 17. Dow Jones industrials declined 4.1%, the worst week since the five days ended Aug 26. The tech-heavy Nasdaq Composite tumbled the most with a 5.5% decline, its worst week since the five days ended Jun 10.
The hotter-than-expected inflation data bolstered the bets for the longer-than-expected aggressive rate hike. According to the latest CME Group’s FedWatch Tool data, investors are pricing an 82% chance of a 75-bps rate hike this week and an 18% chance of a full-percentage-point hike. While the tight monetary policy "for some time" will bring down inflation from its 40-year high, it means slower growth, a weaker job market and "some pain" for households and businesses (read: 4 ETFs to Gain From Hotter-Than-Expected Inflation).
Further, FedEx’s FDX warning accelerated concern over outsized Federal Reserve interest-rate hikes. The package delivery giant withdrew its earnings forecast, citing weakening business conditions.
We have detailed the ETFs below:
Vanguard Total Stock Market ETF (VTI)
Vanguard Total Stock Market ETF topped asset flow creation last week, gathering $2.9 billion in capital. 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 4,056 stocks with key holdings in technology, consumer discretionary, healthcare, industrials and financials.
Vanguard Total Stock Market ETF charges 3 bps in fees per year from investors and trades in an average daily volume of 3.1 million shares. VTI has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Vanguard S&P 500 ETF (VOO)
Vanguard S&P 500 ETF accumulated $2.1 billion in capital. It tracks the S&P 500 Index and holds 503 stocks in its basket, each accounting for more than 7.2% of assets. Vanguard S&P 500 ETF is heavy on the information technology sector while healthcare, consumer discretionary and financials 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 million shares. It has AUM of $268.4 billion and a Zacks ETF Rank #3 with a Medium risk outlook (read: JPMorgan Sees S&P 500 at 4,800: ETFs to Tap).
Vanguard Extended Market ETF (VXF)
Vanguard Extended Market ETF accumulated about $1.6 billion last week, taking its total AUM to $15.3 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 included on the S&P 500 Index.
Vanguard Extended Market ETF is home to 3,666 stocks, with each accounting for no more than 1% share. It charges 6 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
Vanguard Mid-Cap ETF (VO)
Vanguard Mid-Cap ETF pulled in $1.5 billion in capital last week. It targets the mid-cap segment of the broad stock market and tracks the CRSP US Mid Cap Index. It holds 363 stocks with a well-diversified portfolio, as each firm holds no more than 1% of the total assets. Vanguard Mid-Cap ETF has key holdings in technology, industrials, consumer discretionary, financials and healthcare.
With AUM of $51.4 billion, Vanguard Mid-Cap ETF charges investors 4 bps in fees per year and trades in an average daily volume of 577,000 shares. Vanguard Mid-Cap ETF has a Zacks ETF Rank #2 with a Medium risk outlook.
Vanguard Small-Cap ETF (VB)
This fund, which targets the small-cap segment, saw inflows of $1.2 billion. Vanguard Small-Cap ETF follows the CRSP US Small Cap Index and holds a basket of 1516 stocks, with none holding more than 0.4% of assets. Vanguard Small-Cap ETF is widely spread across various sectors, with industrials, financials, consumer discretionary, healthcare and information technology being the top-five (read: Should You Buy Small Cap ETFs Now?).
Vanguard Small-Cap ETF has AUM of $42.6 billion and trades in a solid average daily volume of about 560,000 shares. VB charges 5 bps in fees per year from investors and has a Zacks ETF Rank #2 with a Medium risk outlook.
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FedEx Corporation (FDX): Free Stock Analysis Report
Vanguard Total Stock Market ETF (VTI): ETF Research Reports
Vanguard S&P 500 ETF (VOO): ETF Research Reports
Vanguard SmallCap ETF (VB): ETF Research Reports
Vanguard Extended Market ETF (VXF): ETF Research Reports
Vanguard MidCap ETF (VO): ETF Research Reports
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