Exchange traded fund flows over April suggest investors are taking a harder look at the cheap valuations in international markets after the post-Trump rally pushed U.S. markets toward loftier prices and new record highs. Additionally, low-cost ETF options remains a prominent theme as long-term investors try to optimize returns.
For instance, the iShares Core S&P 500 ETF (NYSEArca: IVV) was the most popular ETF play over the past month, attracting $6.6 billion in net inflows The Vanguard 500 Index (NYSEArca: VOO) was the fifth most popular play, bringing in $1.4 billion in inflows. In contrast, the SPDR S&P 500 ETF (NYSEArca: SPY) was the most hated ETF of the past month as investors yanked $4.3 billion out of the fund.
The shifting sentiment suggests that more long-term investors are leaning toward the cheaper IVV and VOO options – IVV has a 0.04% expense ratio and VOO has a 0.05% expense, whereas SPY comes with a 0.10% annual fee.
Both iShares and Vanguard ETFs have been attracting high inflows in recent years as investors and financial advisors increasingly turn to cheap, passive index-based funds to capitalized on the small improved total returns. In fact, the top ten ETFs with the highest inflows over the past month mostly include cheap iShares and Vanguard ETF options.
Along with the low-cost theme, international equities were also a big play over April. For instance, the iShares Core MSCI EAFE ETF (NYSEArca: IEFA) attracted $2.4 billion in inflows, iShares MSCI EAFE ETF (NYSEArca: EFA) added $1.6 billion and Vanguard FTSE Developed Markets ETF (NYSEArca: VEA) brought in $1.6 billion. The three ETFs all track developed markets outside the U.S., including developed European, Australasia and Far East countries. The iShares MSCI EMU ETF (NYSEArca: EZU), which tracks European Monetary Union or Eurozone states, also saw $1.1 billion in inflows.