Regular ETFs that inflate their assets in the face of rising interest rates

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Oall Street has been pessimistic in recent weeks. This happened on the likelihood of a more rapid tightening of monetary policy by the Federal Reserve. St. Louis Fed President James Bullard said this month he was looking to raise rates from 3% to 3.25% in the second half of 2022, while Chicago Fed President Charles Evans, and his Atlanta counterpart, Raphael Bostic, said they favor a rate hike to neutral.

Data revealing labor market conditions proved strong enough to support faster rate increases. Inflation has been scorching. As a result, bond yields rose. The benchmark yield on US Treasuries jumped to 2.83% on April 14, 2022, from 2.39% recorded at the start of the month.

Against this backdrop, we highlight a few ETFs below that have amassed immense assets in the past week.

S&P500

iShares Core S&P 500 ETF (IVV) — $5.53 billion

According to new data from FactSet, analysts earned the most buy ratings in February and March in more than a decade on S&P 500 stocks as a percentage of their total ratings. Of 10,821 corporate ratings tracked by the benchmark, 57.3% had a buy recommendation from investment analysts as of March 31, slightly behind February at 57.4%. The lion’s share of these buy ratings went to energy, information technology and communication services. This probably helped IVV to inflate its assets.

Obligations

iShares 20+ Year Treasury Bond ETF (TLT) — $3.95 billion

Vanguard Total Bond Market ETF (BND) – $3.30 billion

The bond market also saw an influx of assets. TLT earns 1.84% annually while BND earns 2.32% annually; both fell behind benchmark Treasury yields. The rate hike scenario is negative for bond investment. The rise in assets could be due to increased pressure from short selling.

Emerging Markets

iShares MSCI Emerging Markets ETF (EEM) — $2.86 billion

iShares Core MSCI Emerging Markets ETF (IEMG) — $2.76 billion

Emerging economies are rich in raw materials. Given that the commodity market has been booming lately, emerging market stocks had a reason to soar. Meanwhile, the greenback remained range-bound despite concerns over rising US rates. In fact, EEM beat the S&P 500 by comeback last month.

Total stock market

Vanguard Total Stock Market ETF (TIV) — $2.65 billion

The overall stock market also transported considerable assets last month. The cheap valuation amid the war-induced selloff (between Russia and Ukraine) likely drove investors to the total stock market.

Gold ingots

SPDR Gold Trust (GLD) — $2.54 billion

Investing in gold has been in a good position this year. The demand for safe haven emanating from the war in Russia has reinforced the attractiveness of the yellow metal. Moreover, gold is considered an anti-inflation asset. Skyrocketing inflation is also pushing investors towards this precious metal.

Health care

SPDR Healthcare Sector Fund (XLV) — $1.88 billion

The healthcare sector is a good defensive investment option. Currently, the crisis of the Russian-Ukrainian war and the hawkish stance of the Fed on rate hikes have made the world of investors nervous, making the health sector a safe bet. Additionally, the pandemic has also sparked a race to introduce vaccines, tests and treatment options, putting the health sector in an ideal position.

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iShares 20 Year Treasury Bond ETF (TLT): ETF Research Reports

SPDR Gold (GLD) Stocks: ETF Research Reports

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

Health Sector SPDR ETF (XLV): ETF Research Reports

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

iShares Core MSCI Emerging Markets ETF (IEMG): ETF Research Reports

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

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

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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