Investing

ETF Asset Report YTD: S&P 500 Tops, ESG Loses

Sanghamitra Saha

Published: September 26, 2023 10:42 pm

Wall Street has been upbeat in the year-to-date frame as current stress in the market has been outweighed by superb gains in the first half.  The S&P 500 (up 12.5%), the Dow Jones (up 2.5%) and the Nasdaq (up 26.2%) — all equity indexes have gained this year due to a less-hawkish Fed, cooling inflation, ebbing U.S. recession fears, a steady jobs market, resilient consumers and decent corporate earnings. Most importantly, this year can be easily remembered for the AI boom and the tech rally.

Against this backdrop, below we discuss the year-to-date asset flow of the ETF industry.

S&P 500 Tops

Due to the upbeat performance of the S&P 500, iShares Core S&P 500 ETF IVV and Vanguard S&P 500 ETF VOO have garnered about $34.0 billion and $19.7 billion in assets so far this year. The rally in growth stocks this year, especially the big tech ones, has boosted the S&P 500 materially as the index is heavily skewed in the segment.

Long-Term Treasuries Come in Second

iShares 20+ Year Treasury Bond ETF TLT haveadded about $19 billion in assets this year, despite a loss of 8.2% as of Sep 22, 2023. Higher yields offered by the fund have probably led investors to stick to the fund.

Total Stock & Bond Market Win Too

Total stock market fund Vanguard Total Stock Market Index Fund VTI and Vanguard Total Bond Market Index Fund BND have fetched about $14.8 billion and $11.8 billion in assets, respectively. It shows that a spread-out approach in making investing decisions has worked this year.

Quality ETFs Become Investors’ Favorite

iShares MSCI USA Quality Factor ETF QUAL has generated about $9.9 billion in assets this year. Wall Street has been under pressure in the second half of 2023 due to the global economic downturn, mirroring higher interest rates and the odd situation in China’s domestic markets.

Rates are likely to remain higher for longer in the United States due to sticky inflation. All these factors have made quality ETFs popular choices in recent weeks.

ESG Underperforms

ESG ETF iShares ESG Aware MSCI USA ETF ESGU has lost about $9.21 billion in assets so far this year. Over the past decade, environmentally friendly stocks have tended to outperform others. But the segment failed to impress investors last year amid rising rates. Although tech stocks – which normally have high ESG scores – have rebounded this year, higher-for-longer rate cues probably have left investors edgy about the segment.

Emerging Markets Underperform Too

Emerging market ETFs iShares MSCI Emerging Markets Min Vol Factor ETF EEMV and iShares MSCI Emerging Markets ETF EEM lost about $3.9 billion and $3.3 billion in the quarter. A stronger greenback and a slowdown in the Chinese economy have dealt a blow to the emerging market ETFs so far this year.
iShares 20+ Year Treasury Bond ETF (TLT): ETF Research Reports

iShares MSCI Emerging Markets ETF (EEM): ETF Research Reports

Vanguard Total Stock Market ETF (VTI): ETF Research Reports

Vanguard S&P 500 ETF (VOO): ETF Research Reports

iShares MSCI USA Quality Factor ETF (QUAL): ETF Research Reports

Vanguard Total Bond Market ETF (BND): ETF Research Reports

iShares MSCI Emerging Markets Min Vol Factor ETF (EEMV): ETF Research Reports

iShares Core S&P 500 ETF (IVV): ETF Research Reports

iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports

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