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Weekly ETF Roundup: Broad U.S. Equity Tops, Biotech Flops

Amid resurging COVID-19 infections and fading hopes of additional stimulus, Wall Street managed to hold on to gains last week. The Dow Jones and the S&P 500 rose 0.1% and 0.2%, respectively, while the Nasdaq Composite Index advanced 0.8% (read: Pandemic Surges, Stimulus Fades: ETF Strategies to Follow).

The gains are driven partly by better-than-expected retail sales in September and solid consumer data. Retail sales climbed 1.9% in September, marking the fastest pace in three months, buoyed by higher demand for goods that complement life at home, including furniture and electronics. Meanwhile, consumer sentiment hit the pandemic high in early October with the University of Michigan consumer sentiment index rising to 81.2 from 80.4 in September.

Additionally, news from Pfizer PFE that it would apply for emergency-use authorization in the United States for its vaccine in late November if trials are successful also lifted investors sentiment to end the week.

Against such a backdrop, ETFs overall gathered about $18.5 billion capital last week, bringing year-to-date inflows of $352.6 billion, ahead of the $211.7 billion seen at this same time a year ago. U.S. equity ETFs led the way higher last week with $9.5 billion inflows, closely followed by $4.5 billion in U.S. fixed income ETFs and $3.4 billion in international equity ETFs, per etf.com.

U.S. Equity Shines

Invesco QQQ QQQ was the most-loved ETF with massive inflows of $5.2 billion last week, followed by $1.6 billion in First Trust Capital Strength ETF FTCS. QQQ, having a Zacks ETF Rank #1 (Strong Buy), provides exposure to the largest domestic and international non-financial companies listed on the Nasdaq. FTCS offers exposure to well-capitalized companies with strong market positions based on strong balance sheets, a high degree of liquidity, ability to generate earnings growth, and record financial strength and profit growth. This ETF has a Zacks ETF Rank #3 (Hold).

The resurgence in technology stocks reignited investors’ interest in the Nasdaq ETF while the market gyrations fueled strength in FTCS.

Vanguard Total Stock Market ETF VTI pulled in $1.4 billion in capital while iShares Russell 2000 ETF IWM attracted $795 million in its asset base last week. VTI provides diversified exposure across all market caps as well as growth and value styles, while IWM measures the small-cap segment of the broad U.S. market. The duo has a Zacks ETF Rank #3 (read: Small-Cap ETFs Outperforming Bigger Peers: Here's Why).

Online Retail Rocks

Though ProShares Online Retail ETF ONLN did not make it to the top 10 inflows list due to relatively modest asset base, its assets under management jumped 69% over the past week - the most of any ETF with at least $200 million in AUM. A flare up in coronavirus cases has again compelled people to stay indoors, which in turn boosted demand for e-commerce. ONLN focuses on global retailers that derive significant revenues from online sales (read: Online Retail ETF Hits New 52-Week High).

Biotech & Bank Flops

The appeal for biotech ETFs, which were on high demand due to the development of a coronavirus vaccine or treatment, was diminished. This is especially as Johnson and Johnson JNJ and Eli Lilly LLY halted their trials for the novel disease vaccine over safety concerns with no sign of a vaccine anytime soon. As such, SPDR S&P Biotech ETF XBI was the major loser, losing around $304 million in its asset base. It has a Zacks ETF Rank #2 (Buy).

In the absence of any further stimulus, yields declined pushing banking ETFs lower. SPDR S&P Regional Banking ETF KRE saw outflows of $243 million and has a Zacks ETF Rank #3.

Foreign Equity and Bonds Mixed

While Vanguard Total International Stock ETF VXUS pulled in more than $1 billion in capital, iShares MSCI EAFE ETF EFA dominates the redemption list of last week with outflows of $1.1 billion. In the high-yield bond market, iShares iBoxx USD High Yield Corporate Bond ETF HYG gathered $693 million while SPDR Bloomberg Barclays High Yield Bond ETF JNK saw outflows of $590 million (read: Fed's Support Boosts Inflows in Bond ETFs: 5 Top Picks).

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Johnson Johnson (JNJ): Free Stock Analysis Report
 
Pfizer Inc. (PFE): Free Stock Analysis Report
 
Eli Lilly and Company (LLY): Free Stock Analysis Report
 
SPDR Bloomberg Barclays High Yield Bond ETF (JNK): ETF Research Reports
 
Invesco QQQ (QQQ): ETF Research Reports
 
iShares iBoxx High Yield Corporate Bond ETF (HYG): ETF Research Reports
 
iShares MSCI EAFE ETF (EFA): ETF Research Reports
 
iShares Russell 2000 ETF (IWM): ETF Research Reports
 
SPDR SP Biotech ETF (XBI): ETF Research Reports
 
Vanguard Total Stock Market ETF (VTI): ETF Research Reports
 
SPDR SP Regional Banking ETF (KRE): ETF Research Reports
 
Vanguard Total International Stock ETF (VXUS): ETF Research Reports
 
First Trust Capital Strength ETF (FTCS): ETF Research Reports
 
ProShares Online Retail ETF (ONLN): ETF Research Reports
 
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