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Investors Return to ETFs: 5 Hot Picks of Last Week

After a few shaky weeks, Wall Street saw strength last week, with the major benchmarks ending in green. A slew of strong corporate earnings, especially from the banking sector and many others, coupled with an upbeat retail sales data rekindled investors’ interest in the stock market.

A surprise rise in retail sales for September has raised optimism about an economic recovery. Airlines and other travel-related company also spiked following the White House announcement that it will lift travel restrictions for fully vaccinated foreign nationals effective Nov 8, at land borders and for air travel (read: Ride the Latest Market Rally With These ETFs).

After two weeks of sub-$10 billion inflows and a $30 billion outflow in late September, investors retuned to equity funds. ETFs overall gathered more than $16.3 billion capital last week (Oct 8-14), bringing in inflows of $669.5 billion year to date. U.S. equity ETFs led the way higher last week with $10.2 billion inflows, closely followed by $2.8 billion in U.S. fixed income ETFs and $2.2 billion in international equity ETFs, per

Given this, we have highlighted five funds that dominated the top creation list last week and can continue to be investors’ darlings:

SPDR S&P 500 ETF Trust SPY

SPY topped asset flow creation last week, gathering $1.6 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket with information technology, healthcare, consumer discretionary, financials and communication services being the top five, with a double-digit allocation each. With AUM of $389.3 billion, the ETF charges investors 9 bps in annual fees and trades in an average daily volume of 68 million shares. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: 5 ETFs to Play the Key Events in Fourth Quarter).

Invesco QQQ QQQ

This ETF has gathered around $1.6 billion in its asset base last week. It provides exposure to the 102 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Information technology accounts for 48.9% of the assets while communication services and consumer discretionary round off the next two spots. QQQ is one of the largest and most-popular ETFs in the large-cap space with an AUM of $185.8 billion and an average daily volume of 37.4 million shares. It charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.

First Trust Capital Strength ETF FTCS

This ETF accumulated around $1.3 billion in its asset base last week. It offers exposure to well-capitalized companies with strong market positions based on robust balance sheets, a high degree of liquidity, the ability to generate earnings growth, and record financial strength and profit growth. Holding 50 stocks in its basket, the fund has key holdings in industrials, healthcare, technology and consumer staples. It charges 56 bps in annual fees and has AUM of $9.7 billion. The product trades in an average daily volume of 584,000 shares and has a Zacks ETF Rank #2 with a Medium risk outlook.      

iShares 20+ Year Treasury Bond ETF TLT

TLT has accumulated $569 million last week, taking its total AUM to $15.4 billion. This is the most popular and liquid ETF in the long-dated bond space with an average daily volume of 15.3 million shares. It tracks the ICE U.S. Treasury 20+ Year Bond Index, holding 33 securities in its basket. The fund has an average maturity of 26.11 years and an effective duration of 19.04 years. It charges 15 bps in fees per year.

Vanguard Information Technology ETF VGT

VGT gathered $523 million in capital last week. This fund manages $50 billion in its asset base and provides exposure to technology companies that serve the electronics and computer industries or that manufacture products. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. The ETF has 0.10% in expense ratio while volume is solid at nearly 589,000 shares. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: 5 ETFs & Stocks From the Favorite Sectors of Q3 Earnings).

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iShares 20 Year Treasury Bond ETF (TLT): ETF Research Reports
Invesco QQQ (QQQ): ETF Research Reports
SPDR S&P 500 ETF (SPY): ETF Research Reports
Vanguard Information Technology ETF (VGT): ETF Research Reports
First Trust Capital Strength ETF (FTCS): ETF Research Reports
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