5 Hot ETFs of Last Week

ETFs across various categories pulled in $4.4 billion in capital last week, pushing the year-to-date inflows to $532 billion. U.S. fixed-income ETFs led the way with $3.4 billion in inflows, followed by inflows of $2.4 billion in leveraged ETFs and $2.2 billion in U.S. equity ETFs.

Vanguard S&P 500 ETF VOO, Direxion Daily Semiconductor Bull 3x Shares SOXL, SPDR Bloomberg 1-3 Month T-Bill ETF BIL, Invesco QQQ Trust QQQ and Schwab Intermediate-Term U.S. Treasury ETF SCHR dominated the top creation list last week.

Wall Street witnessed a rollercoaster ride last week, dropping sharply and then climbing up. The S&P 500 recouped all its losses to end the week after the Aug 5 steep sell-off prompted by fears of a recession following weak jobs data. The Dow Jones Industrial Index shed 0.6% and the tech-heavy Nasdaq Composite Index fell 0.2% last week.

The batch of early last week's data showed weakening labor markets and a slump in manufacturing that spurred recession concerns and battered global stock markets. Though these data signal a slowdown, the U.S. economy is far from recession anytime soon. The latest data shows that U.S. services sector activity rebounded from a four-year low in July amid a rise in orders and employment. The ISM survey's new orders measure rebounded to 52.4 from 47.3 in June, which was the lowest since December 2022.

Investors are betting that the Fed will respond to signs of weakness in the economy with more aggressive interest rate cuts. Per CME Group data, most investors expect larger cuts in the September meeting, with futures implying a 51% probability of a 50 bps cut and 49% odds of a 25 bps reduction. Lower interest rates generally lead to reduced borrowing costs, which help businesses expand their operations more easily, resulting in increased profitability. This, in turn, stimulates economic growth and provides a boost to the stock market.

We have detailed the ETFs below:

Vanguard S&P 500 ETF

Vanguard S&P 500 ETF topped the asset flow creation last week, gathering $3 billion in capital. It tracks the S&P 500 Index and holds 504 stocks in its basket, each accounting for no more than 7.2% of the assets. Vanguard S&P 500 ETF is heavy on the information technology sector, while financials and healthcare round off the next two spots with a double-digit allocation each.

Vanguard S&P 500 ETF charges investors 3 bps in annual fees and trades in an average daily volume of 4 million shares. It has AUM of $463.8 billion and a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.

Direxion Daily Semiconductor Bull 3x Shares

Direxion Daily Semiconductor Bull 3x Shares has gathered $1.7 billion in its asset base, propelling its AUM to $10.5 billion. It targets the semiconductor corner of the technology sector with three times leveraged exposure to the NYSE Semiconductor Index. Direxion Daily Semiconductor Bull 3x Shares charges 72 bps in fees per year and trades in an average daily volume of 67 million shares.

SPDR Bloomberg 1-3 Month T-Bill ETF

SPDR Bloomberg 1-3 Month T-Bill ETF saw an inflow of $1.6 billion last week. It seeks to provide exposure to zero-coupon U.S. Treasury securities with a remaining maturity of 1-3 months. It follows the Bloomberg 1-3 Month U.S. Treasury Bill Index, holding 24 securities in its basket. Both average maturity and adjusted duration are at 0.13 years each.

SPDR Bloomberg 1-3 Month T-Bill ETF has AUM of $34.4 billion and an average daily volume of 7 million shares. It charges 13 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

Invesco QQQ Trust

Invesco QQQ Trust has accumulated $1.4 billion in capital. It provides exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Invesco QQQ has a modest concentration on the top firms.

Invesco QQQ is one of the largest and most popular ETFs in the large-cap space, with an AUM of $271 billion and an average daily volume of 33 million shares. QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

Schwab Intermediate-Term U.S. Treasury ETF

Schwab Intermediate-Term U.S. Treasury ETF saw an inflow of $1.2 billion. It offers exposure to the intermediate-term U.S. Treasury bond market and follows the Bloomberg US Treasury 3-10 Year Index. It has an effective duration of 5.00 years and an average maturity of 5.60 years. With AUM of $9.7 billion, Schwab Intermediate-Term U.S. Treasury ETF trades in an average daily volume of 1.2 million and has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook.

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