February saw a continuation of market turbulence, driven by a higher-than-expected inflation reading for January and escalating geopolitical tensions, but three funds in ALPS’ ETF suite managed to rake in assets amid the turmoil.
The three ETFs that saw the greatest inflows during the month were all equal-weighted strategies. Equal-weight funds have been on the rise in popularity as the strategy continue to outperform its market cap-weighted peers.
In February, the S&P 500 Equal Weight managed to limit its losses to just 0.9%, as some of the heaviest drops were suffered by the market’s largest blue chips, compared the S&P 500 closing the month down 3%, according to the February 2022 S&P 500 Factor Dashboard.
The ALPS Sector Dividend Dogs ETF (SDOG) saw $18 million in one-month flows, the greatest inflows of any ALPS ETF during the month of January.
SDOG has taken in $22 million in net new assets year-to-date, as of the end of February.
The fund has an expense ratio of 40 basis points and is unique in that it maintains equal allocations to each of 10 sectors, which makes it very different from many dividend-focused products, which tend to have biases towards utilities and financials, according to ETF Database.
The ALPS Equal Sector Weight ETF (EQL) took in over $10 million last month, trailing only SDOG in ALPS’ ETF line-up.
EQL, which sports a price tag of 28 basis points, offers exposure to the domestic equity market, but utilizes a unique methodology to access this asset class.
Each sector of the economy receives an equal weight in EQL, a strategy that results in a drastically different composition relative to market cap-weighted products such as the SPDR S&P 500 ETF (SPY). EQL is designed to offer more balanced exposure and has the added benefit of avoiding the potentially adverse impact of rallies or crashes in specific sectors of the economy.
The ALPS International Sector Dividend Dogs ETF (IDOG) brought in $5 million in new assets in February, the third-greatest flows for the month among ALPS’ ETF range. The fund has seen over $12 million in year-to-date inflows.
IDOG carries an expense ratio of 50 basis points.
Looking abroad is one way that investors are finding ways to boost the yield in equities.
Non-U.S. equities compose nearly 40% of global equity market capitalization when looking at the MSCI ACWI Index, as of November 2021, and while the U.S. is the largest source of dividends, it only represents about half of the global dividend pool, according to MSCI.
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