The month of May has been decent for Wall Street. The MSCI's broadest index of world stocks gained about 1.4% in May. The S&P 500, the Dow Jones, the Nasdaq Composite and the Russell 2000 have gained about 1%, 1.1%, 1.3% and 2.5% in the past month. Both European and U.S. stocks hovered around their peaks.
Covid cases in the United States have fallen to their lowest levels since June. Almost 50% of all Americans have received at least one dose of a COVID-19 vaccine. This also infused optimism to Wall Street. Rates have been rising fast in the United States over the past few weeks on growing risk appetite and reflationary optimism.
Vaccine distribution and upbeat economic data pints gave a material boost to the U.S. treasury yields. As of Jun 1, 2021, the benchmark U.S. treasury yield was 1.62% versus 0.93% noted at the start of the year.
The ISM manufacturing report for May was roughly in line with expectations, showing continued strong growth, rising commodity costs and higher prices. Expectations for job creation is also higher. Economists expect the data of a creation of around 674,000 jobs in the month of May, after April’s read came in below expectations at 266,000, as quoted on CNBC (read: 5 ETFs to Play Rising Yields).
In this scenario, we highlight ETF asset flows for the month of May (per etf.com).
S&P 500 & Total Stock Market Top
The S&P 500 hit record highs in the month on upbeat U.S. economic data points and corporate earnings. Apart from the reopening-driven solid GDP growth, the labor market has also been moderately steady.
Vanguard S&P 500 ETF VOO and Vanguard Total Stock Market ETF VTI were the top-performer with inflows of $3.78 billion and $2.66 billion, respectively. Invesco S&P 500 Equal Weight ETF RSP also attracted $1.57 billion in the month.
Foreign ETFs Top
iShares Core MSCI EAFE ETF IEFA and JPMorgan BetaBuilders Europe ETF BBEU attracted about $2.63 billion and $1.98 billion, respectively. As we have discussed earlier, foreign markets were also steady in the month.
Value ETFs Gain
Vanguard Value ETF VTV added about $2.12 billion in assets in the month. As yields have risen in the month, value ETFs – that perform greatly in a rising a rising rate environment, attracted sturdy assets.
Gold ETFs Gain
Gold is still a “relatively cheap” investment opportunity and could continue gaining even if it tops $1,900 per troy ounce, per TD Securities head of global strategy Richard Kelly, as quoted on CNBC.
Dovish central banks, relatively weaker greenback and overvaluation concerns in the stock market led many investors toward SPDR Gold Trust GLD that attracted $1.57 billion in the month.
Financials ETFs Another Winner Too
Financial Select Sector SPDR ETF XLF attracted about $1.53 billion in the month as yield curve steepened.a rising rate environment have helped the financial sector a lot.
The financial sector, which accounts for around one-fifth of the S&P 500 Index, had a decent Q1. Results of the Finance sector have benefited from releases of loan-loss reserves that big banks believe will not be required any more, considering the improving outlook for the U.S. economy.
Activity levels in equity underwriting, M&A and trading also hovered around record levels for the seasonally weak Q1, which more than offset the continued softness in lending demand and margin pressures.
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ETF Asset Reports of May
The month of May has been decent for Wall Street. The MSCI's broadest index of world stocks gained about 1.4% in May. The S&P 500, the Dow Jones, the Nasdaq Composite and the Russell 2000 have gained about 1%, 1.1%, 1.3% and 2.5% in the past month. Both European and U.S. stocks hovered around their peaks.
Covid cases in the United States have fallen to their lowest levels since June. Almost 50% of all Americans have received at least one dose of a COVID-19 vaccine. This also infused optimism to Wall Street. Rates have been rising fast in the United States over the past few weeks on growing risk appetite and reflationary optimism.
Vaccine distribution and upbeat economic data pints gave a material boost to the U.S. treasury yields. As of Jun 1, 2021, the benchmark U.S. treasury yield was 1.62% versus 0.93% noted at the start of the year.
The ISM manufacturing report for May was roughly in line with expectations, showing continued strong growth, rising commodity costs and higher prices. Expectations for job creation is also higher. Economists expect the data of a creation of around 674,000 jobs in the month of May, after April’s read came in below expectations at 266,000, as quoted on CNBC (read: 5 ETFs to Play Rising Yields).
In this scenario, we highlight ETF asset flows for the month of May (per etf.com).
S&P 500 & Total Stock Market Top
The S&P 500 hit record highs in the month on upbeat U.S. economic data points and corporate earnings. Apart from the reopening-driven solid GDP growth, the labor market has also been moderately steady.
Vanguard S&P 500 ETF VOO and Vanguard Total Stock Market ETF VTI were the top-performer with inflows of $3.78 billion and $2.66 billion, respectively. Invesco S&P 500 Equal Weight ETF RSP also attracted $1.57 billion in the month.
Foreign ETFs Top
iShares Core MSCI EAFE ETF IEFA and JPMorgan BetaBuilders Europe ETF BBEU attracted about $2.63 billion and $1.98 billion, respectively. As we have discussed earlier, foreign markets were also steady in the month.
Value ETFs Gain
Vanguard Value ETF VTV added about $2.12 billion in assets in the month. As yields have risen in the month, value ETFs – that perform greatly in a rising a rising rate environment, attracted sturdy assets.
Gold ETFs Gain
Gold is still a “relatively cheap” investment opportunity and could continue gaining even if it tops $1,900 per troy ounce, per TD Securities head of global strategy Richard Kelly, as quoted on CNBC.
Dovish central banks, relatively weaker greenback and overvaluation concerns in the stock market led many investors toward SPDR Gold Trust GLD that attracted $1.57 billion in the month.
Financials ETFs Another Winner Too
Financial Select Sector SPDR ETF XLF attracted about $1.53 billion in the month as yield curve steepened.a rising rate environment have helped the financial sector a lot.
The financial sector, which accounts for around one-fifth of the S&P 500 Index, had a decent Q1. Results of the Finance sector have benefited from releases of loan-loss reserves that big banks believe will not be required any more, considering the improving outlook for the U.S. economy.
Activity levels in equity underwriting, M&A and trading also hovered around record levels for the seasonally weak Q1, which more than offset the continued softness in lending demand and margin pressures.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>