Stocks rebounded in March as investors managed their expectations for the future, which include considerations such as decades-high inflation, rising interest rates, and the implications of the Russia-Ukraine war.
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 continues to outperform its market cap-weighted peers.
Interestingly, the most popular funds in ALPS’ line-up of ETFs in terms of monthly inflows did not change from February; however, the order saw a shake-up.
The ALPS International Sector Dividend Dogs ETF (IDOG) saw $10 million in net inflows in March, twice the amount of February inflows, moving it to the top of the pack.
IDOG, with $179 million in assets under management, has an expense ratio of 50 basis points, according to ETF Database.
International dividends are one way that investors can 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.
Taking second place for the second month in a row, the ALPS Equal Sector Weight ETF (EQL) saw $8 million in March inflows, a slight reduction from the $10 million in February, according to ETF Database.
EQL, which has $242 million in assets under management and carries an expense ratio 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 Sector Dividend Dogs ETF (SDOG), which took the top spot in February after having seen $18 million in monthly flows, took in a more modest $7 million in March, dropping it down to third place, according to ETF Database.
SDOG has $1.3 billion in assets under management and has seen $29 million in net inflows year to date. 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.
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