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U.S. Equity & ARK ETFs Top Last Week Inflows, Bonds Lag

Overall, ETFs gathered about $11.5 billion capital last week, bringing in year-to-date inflows of $129.3 billion, higher than $98.3 billion seen in the year-ago period. International equity ETFs led the way higher last week with $6.1 billion inflows, closely followed by $4.7 billion in U.S. equity ETFs and just $117.5 million in international fixed income ETFs, per etf.com.

U.S. Equity Shines

Vanguard S&P 500 ETF VOO and SPDR S&P 500 SPY topped the creation list, pulling in about $1.3 billion and $1.1 billion, respectively, of capital last week. Both the funds track the S&P 500 Index and have a Zacks ETF Rank #3 (Hold). The hopes of further U.S. stimulus package, signs of a healing labor market, continued progress in more vaccines, rapid vaccination rollout and better-than-expected earnings has led to increased risk appetite though soaring yields and growing inflationary pressure have been bothering investors lately.

Vanguard Total Stock Market ETF VTI saw inflows of $839 million. It provides diversified exposure across all market caps as well as growth and value styles and has a Zacks ETF Rank #2 (Buy).

ARK ETFs Continue to Lure

Ark Investment Management ETFs continued to see a huge surge in their popularity last week. ARK Fintech Innovation ETF ARKF gathered $746 million in assets last week while inflows were $556 million for Ark Innovation ETF ARKK and $522 million for ARK Next Generation Internet ETF ARKW. With the latest inflows, ARK became the seventh-largest ETF issuer, with nearly $60 billion in AUM (read: 5 Stocks That Make Ark Innovation ETF Red Hot).

These ARK Invest ETFs are designed to capture long-term appreciation and alpha uncorrelated to traditional indices or managers. These provide exposure to aggressive growth through a fund rather than individual stocks and complement traditional broad index-based value or growth strategies.

In particular, ARKF invests in a company having the theme of Fintech innovation. The Adviser defines Fintech innovation as the introduction of a technologically enabled new product or service that potentially changes the way the financial sector works, which ARK believes includes transaction innovations, blockchain technology, risk transformation, frictionless funding platforms, customer facing platforms, and new intermediaries.

ARKK invests in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research related to the areas of DNA technologies (Genomic Revolution), industrial innovation in energy, automation and manufacturing (Industrial Innovation), increased use of shared technology, infrastructure and services (Next Generation Internet), and technologies that make financial services more efficient (Fintech Innovation).

ARKW focuses on companies that are expected to benefit from the shift in technology infrastructure to cloud, enabling mobile, new and local services such as companies that rely on or benefit from the increased use of shared technology, infrastructure and services, Internet-based products and services, new payment methods, big data, the Internet of Things (IoT), and social distribution and media. These companies may develop, produce or enable cloud computing & cyber security, e-commerce, big data & Artificial Intelligence, mobile technology and IoT, social platforms, and blockchain & P2P.

International ETFs Rock

Vanguard FTSE Emerging Markets ETF VWO and Vanguard FTSE Developed Markets ETF VEA accumulated $820 million and $497 million, respectively, last week. While VMO offers exposure to emerging markets, VEA targets the developed market. The duo has a Zacks ETF Rank #3 (read: Time for Emerging Market ETFs?).

Fixed Income ETFs Lags

The high-flying stock market and higher yields have taken the sheen away from the fixed income world. The 10-year Treasury yield climbed above 1.36% for the first time since February 2020 last week. As such, iShares iBoxx $ Investment Grade Corporate Bond ETF LQD led the redemption list last week, pulling out about $1.9 billion in assets. It offers exposure to a broad range of U.S. investment grade corporate bonds. The fund has a Zacks ETF Rank #3.

The iShares 20+ Treasury Bond ETF TLT and iShares iBoxx USD High Yield Corporate Bond ETF HYG also saw outflows of $1.1 billion and $735 million, respectively. TLT offers exposure to long-term U.S. Treasury bonds with average maturity of 26.02 years while HYG provides exposure to a broad range of U.S. high-yield corporate bonds. Both the products have a Zacks ETF Rank #4 (Sell) (read: Inverse Treasury ETFs to Win as Yields Jump).

However, iShares 7-10 Year Treasury Bond ETF IEF, which provides exposure to Exposure to intermediate-term U.S. Treasury bonds with average maturity of 8.41 years, has gathered about $834 million in capital. It has a Zacks ETF Rank #3.

Utilities & Gold Flops

The ultra-popular, Utilities Select Sector SPDR XLU and SPDR Gold Trust ETF GLD failed to impress investors last week with outflows of $783 million and $542 million, respectively (read: Yield Curve Steepens the Most Since 2017: ETFs to Win/Lose).

XLU targets the utilities sector, which generally underperforms in a rising rate environment and lost steam being defensive in nature. Meanwhile, GLD lost its luster as U.S. Treasury yields surged and the greenback strengthened. Both XLU and GLD have a Zacks ETF Rank #3.

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iShares 20 Year Treasury Bond ETF (TLT): ETF Research Reports
 
SPDR Gold Shares (GLD): ETF Research Reports
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
iShares iBoxx High Yield Corporate Bond ETF (HYG): ETF Research Reports
 
Utilities Select Sector SPDR ETF (XLU): ETF Research Reports
 
iShares 710 Year Treasury Bond ETF (IEF): ETF Research Reports
 
iShares iBoxx Investment Grade Corporate Bond ETF (LQD): ETF Research Reports
 
Vanguard Total Stock Market ETF (VTI): ETF Research Reports
 
Vanguard FTSE Emerging Markets ETF (VWO): ETF Research Reports
 
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