October ETF Asset Report: U.S. Equities Prevail

The month of October was an eventful one. A host of corporate earnings and the passage of a $4-trillion budget measure by Senate and House drove the market. Especially, upbeat tech earnings and higher chances of tax reform were instrumental in pushing Wall Street higher and spreading optimism among investors.

Overall, global markets were steady in this time frame. Most importantly, Brent oil hit the $6-level on a likely OPEC output cut extension. At the end of the month, Brent touched its highest level since July 2015.

All the events left their mark on the quarterly ETF asset accumulation and redemption process. Let’s take a look at the corners that were the hot favorites of investors in the second quarter and those that were cast out. The data is as per etf.com till Oct 27, 2017.

U.S. Equities Stand Tall

The S&P 500 was on radar as investors flocked to SPDR S&P 500 ETF Trust (SPY – Free Report), iShares Core S&P 500 ETF (IVV – Free Report) and Vanguard S&P 500 ETF (VOO – Free Report). The funds SPY, IVV, QQQ and DIA garnered respectively about $8.07 billion, $3.67 billion and $2.09 billion in assets in the month. PowerShares QQQ Trust (QQQ – Free Report) also drew about $1.19 billion in assets. This was a confirmation of solid investor confidence in U.S. equities.

Small-Caps Also in Investors’ Favor

Small-cap U.S. ETF iShares Russell 2000 ETF (IWM – Free Report)also gathered about $1.89 billion. Hopes of tax cuts and deregulation favored U.S. stocks. Also, at the end of the month, the Commerce Department released Q3 economic growth data of 3% compared with 3.1% growth in the second quarter. The latest reading beat the 2.5%growth forecast and was attained despite two deadly hurricanes in the quarter.

Naturally, all these factors gave a boost to the otherwise-reeling small-cap ETFs as pint-sized stocks are more domestically focused. Signs of an uptick in the U.S. economy probably made investors look back at small-cap ETFs. The fund IWM attracted about $1.89 billion in the month.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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