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5 ETFs That Hauled in the Maximum Asset Flow in Q1
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Overall, ETFs pulled in $76.9 billion capital in the first quarter. U.S. fixed income ETFs led the way higher with $43.8 billion inflows, nearly triple the $15 billion inflows seen during the year-ago quarter. This was closely followed by $28.8 billion in international equity ETFs and $5.4 billion in international fixed income ETFs, per etf.com.
However, U.S. equity ETFs bled $2.9 billion last quarter, a sharp reversal from the $99 billion haul in the year-ago quarter. Investors shunned equity ETFs in favor of fixed-income counterparts amid stock market volatility, Fed rate hike and a series of bank failures. As such, iShares Edge MSCI USA Quality Factor ETF (QUAL - Free Report) , iShares 7-10 Year Treasury Bond ETF (IEF - Free Report) , JPMorgan Equity Premium Income ETF (JEPI - Free Report) , JPMorgan BetaBuilders Europe ETF (BBEU - Free Report) and iShares 20+ Year Treasury Bond ETF (TLT - Free Report) dominated the top creation list last quarter.
Q1 Market Trend in Brief
The last quarter was all about Fed and the bank crisis. U.S. stocks began the year with a bang as cooling inflation and hopes of the Fed’s slower rate hike path returned the appeal for risk-on trade. But the optimism faded in February with strings of hot economic data that rekindled worries about a longer-than-expected Fed rate hike. Then, the failure of several big banks and fears of a recession made investors jittery in March.
Amid the turmoil, the three major indices recorded positive returns. The tech-heavy Nasdaq Composite Index wrapped up its best quarter since 2020, climbing 16.8%. It outdid other indices as the S&P 500 gained 6% and the Dow Jones Industrial Average was nearly flat over the quarter.
The outperformance in the Nasdaq Index was driven by a huge rally in mega-cap tech stocks. This is especaiily true as the bank turbulence led investors’ flight to mega-cap, cash-rich technology stocks, which have strong balance sheets, durable revenue streams and robust profit margins, and are, thus, better positioned to withstand a possible economic downturn (read: What Lies Ahead for Tech Stocks & ETFs After a Blockbuster Quarter).
Meanwhile, the fixed-income market endured a chaotic first quarter due to the collapse of Silicon Valley Bank and a mixed bag of investor expectations for the direction of monetary policy. The yield on 2-year notes soared past 5% for the first time since 2007 in early March, before staging its biggest three-day decline since 1987.
Shares Edge MSCI USA Quality Factor ETF was the top asset creator last week, pulling in $7.1 billion in capital. It provides exposure to large and mid-cap stocks exhibiting positive fundamentals (high return on equity, stable year-over-year earnings growth and low financial leverage) by tracking the MSCI USA Sector Neutral Quality Index. QUAL holds 124 stocks in its basket, with each making up not more than 5.5% share.
With an AUM of $25.2 billion, iShares Edge MSCI USA Quality Factor ETF charges 15 bps of annual fees, and trades an average daily volume of 1.7 million shares.
iShares 7-10 Year Treasury Bond ETF accumulated $6.2 billion last quarter. It targets mid-cap U.S. Treasury bonds and tracks the ICE US Treasury 7-10 Year Index. With AUM of $28.2 billion, iShares 7-10 Year Treasury Bond ETF holds 15 bonds in its basket with weighted maturity of 8.37 years and an effective duration of 7.63 years (read: Most Loved/Hated ETFs Amid the Height of Banking Crisis).
iShares 7-10 Year Treasury Bond ETF charges investors 15 bps in fees per year and trades in an average daily volume of 9.5 million shares. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
JPMorgan Equity Premium Income ETF has gathered $5.8 billion in capital. It seeks to provide current income while maintaining prospects for capital appreciation. JPMorgan Equity Premium Income ETF generates income through a combination of selling options and investing in U.S. large-cap stocks, seeking to deliver a monthly income stream from associated option premiums and stock dividends.
JPMorgan Equity Premium Income ETF has AUM of $22.1 billion and charges 35 bps in annual fees. The product trades in an average daily volume of 5 million shares.
JPMorgan BetaBuilders Europe ETF has pulled in $5.7 billion in capital. It provides investors exposure to developed European equity markets by tracking the Morningstar Developed Europe Target Market Exposure Index, which is a free-float adjusted, market-cap weighted index consisting of stocks traded on the primary exchanges in developed countries across Europe (read: Should You Invest in Europe ETFs Despite Credit Suisse Crisis?).
Holding 465 stocks in its basket, JPMorgan BetaBuilders Europe ETF has amassed $9 billion in its asset base and charges 9 bps in fees from investors. It trades in a heavy volume of 1.1 million shares a day on average and has a Zacks ETF Rank #4 (Sell).
iShares 20+ Year Treasury Bond ETF gathered $5.3 billion in capital. It provides exposure to long-term Treasury bonds by tracking the ICE U.S. Treasury 20+ Year Bond Index. iShares 20+ Year Treasury Bond ETF holds 35 securities in its basket and charges 15 bps in annual fees. It has an average maturity of 25.49 years and an effective duration of 17.57 years.
TLT is one of the most popular and liquid ETFs in the bond space, with AUM of $33.6 billion and an average daily volume of 21 million shares. iShares 20+ Year Treasury Bond ETF has a Zacks ETF Rank #4 with a High risk outlook.
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5 ETFs That Hauled in the Maximum Asset Flow in Q1
Overall, ETFs pulled in $76.9 billion capital in the first quarter. U.S. fixed income ETFs led the way higher with $43.8 billion inflows, nearly triple the $15 billion inflows seen during the year-ago quarter. This was closely followed by $28.8 billion in international equity ETFs and $5.4 billion in international fixed income ETFs, per etf.com.
However, U.S. equity ETFs bled $2.9 billion last quarter, a sharp reversal from the $99 billion haul in the year-ago quarter. Investors shunned equity ETFs in favor of fixed-income counterparts amid stock market volatility, Fed rate hike and a series of bank failures. As such, iShares Edge MSCI USA Quality Factor ETF (QUAL - Free Report) , iShares 7-10 Year Treasury Bond ETF (IEF - Free Report) , JPMorgan Equity Premium Income ETF (JEPI - Free Report) , JPMorgan BetaBuilders Europe ETF (BBEU - Free Report) and iShares 20+ Year Treasury Bond ETF (TLT - Free Report) dominated the top creation list last quarter.
Q1 Market Trend in Brief
The last quarter was all about Fed and the bank crisis. U.S. stocks began the year with a bang as cooling inflation and hopes of the Fed’s slower rate hike path returned the appeal for risk-on trade. But the optimism faded in February with strings of hot economic data that rekindled worries about a longer-than-expected Fed rate hike. Then, the failure of several big banks and fears of a recession made investors jittery in March.
Amid the turmoil, the three major indices recorded positive returns. The tech-heavy Nasdaq Composite Index wrapped up its best quarter since 2020, climbing 16.8%. It outdid other indices as the S&P 500 gained 6% and the Dow Jones Industrial Average was nearly flat over the quarter.
The outperformance in the Nasdaq Index was driven by a huge rally in mega-cap tech stocks. This is especaiily true as the bank turbulence led investors’ flight to mega-cap, cash-rich technology stocks, which have strong balance sheets, durable revenue streams and robust profit margins, and are, thus, better positioned to withstand a possible economic downturn (read: What Lies Ahead for Tech Stocks & ETFs After a Blockbuster Quarter).
Meanwhile, the fixed-income market endured a chaotic first quarter due to the collapse of Silicon Valley Bank and a mixed bag of investor expectations for the direction of monetary policy. The yield on 2-year notes soared past 5% for the first time since 2007 in early March, before staging its biggest three-day decline since 1987.
Let’s delve into the five ETFs in detail below:
iShares Edge MSCI USA Quality Factor ETF (QUAL - Free Report)
Shares Edge MSCI USA Quality Factor ETF was the top asset creator last week, pulling in $7.1 billion in capital. It provides exposure to large and mid-cap stocks exhibiting positive fundamentals (high return on equity, stable year-over-year earnings growth and low financial leverage) by tracking the MSCI USA Sector Neutral Quality Index. QUAL holds 124 stocks in its basket, with each making up not more than 5.5% share.
With an AUM of $25.2 billion, iShares Edge MSCI USA Quality Factor ETF charges 15 bps of annual fees, and trades an average daily volume of 1.7 million shares.
iShares 7-10 Year Treasury Bond ETF (IEF - Free Report)
iShares 7-10 Year Treasury Bond ETF accumulated $6.2 billion last quarter. It targets mid-cap U.S. Treasury bonds and tracks the ICE US Treasury 7-10 Year Index. With AUM of $28.2 billion, iShares 7-10 Year Treasury Bond ETF holds 15 bonds in its basket with weighted maturity of 8.37 years and an effective duration of 7.63 years (read: Most Loved/Hated ETFs Amid the Height of Banking Crisis).
iShares 7-10 Year Treasury Bond ETF charges investors 15 bps in fees per year and trades in an average daily volume of 9.5 million shares. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
JPMorgan Equity Premium Income ETF (JEPI - Free Report)
JPMorgan Equity Premium Income ETF has gathered $5.8 billion in capital. It seeks to provide current income while maintaining prospects for capital appreciation. JPMorgan Equity Premium Income ETF generates income through a combination of selling options and investing in U.S. large-cap stocks, seeking to deliver a monthly income stream from associated option premiums and stock dividends.
JPMorgan Equity Premium Income ETF has AUM of $22.1 billion and charges 35 bps in annual fees. The product trades in an average daily volume of 5 million shares.
JPMorgan BetaBuilders Europe ETF (BBEU - Free Report)
JPMorgan BetaBuilders Europe ETF has pulled in $5.7 billion in capital. It provides investors exposure to developed European equity markets by tracking the Morningstar Developed Europe Target Market Exposure Index, which is a free-float adjusted, market-cap weighted index consisting of stocks traded on the primary exchanges in developed countries across Europe (read: Should You Invest in Europe ETFs Despite Credit Suisse Crisis?).
Holding 465 stocks in its basket, JPMorgan BetaBuilders Europe ETF has amassed $9 billion in its asset base and charges 9 bps in fees from investors. It trades in a heavy volume of 1.1 million shares a day on average and has a Zacks ETF Rank #4 (Sell).
iShares 20+ Year Treasury Bond ETF (TLT - Free Report)
iShares 20+ Year Treasury Bond ETF gathered $5.3 billion in capital. It provides exposure to long-term Treasury bonds by tracking the ICE U.S. Treasury 20+ Year Bond Index. iShares 20+ Year Treasury Bond ETF holds 35 securities in its basket and charges 15 bps in annual fees. It has an average maturity of 25.49 years and an effective duration of 17.57 years.
TLT is one of the most popular and liquid ETFs in the bond space, with AUM of $33.6 billion and an average daily volume of 21 million shares. iShares 20+ Year Treasury Bond ETF has a Zacks ETF Rank #4 with a High risk outlook.