U.S. equity ETFs regained popularity in April after largely being shunned in the first quarter relative to international equities and fixed income products. While already-large products, such as the SPDR S&P 500 ETF (SPY), the iShares MSCI USA Quality Factor ETF (QUAL), and the JPMorgan Equity Premium Income ETF (JEPI), swelled in size due to net inflows, as we previously covered, we wanted to spotlight a few up-and-coming ETFs that also gathered new money in April.
Last week, VettaFi acquired the LOCIGLY platform. LOGICLY is a leading web-based platform that allows financial advisors and asset managers to streamline the investment research process and to access comprehensive portfolio management capabilities, real-time alerts, and advanced analytics. I’m still diving into the many features, but one that caught my eye was the ability to easily see what ETFs had a high percentage of net inflows relative to assets over a short period of time. These funds are likely off the radar for many investors, but some have found them appealing, resulting in an uptick in net inflows.
One such fund was the Janus Henderson Small Cap Growth Alpha ETF (JSML). JSML crossed the $100 million mark in April due to a $37 million net inflow on April 20, according to LOCICLY data. The ETF tracks a proprietary index based on Janus Henderson’s bottom-up research on small-caps by focusing on companies with revenue growth, capital efficiency, and operating profitability. Examples of fund holdings include Doximity, STAAR Surgical, and Westlake. As of late April, JSML was up 3.2%.
The SPDR S&P Insurance ETF (KIE) is less well-known than many of its financial sector peers that are heavily weighted to banks. Maybe this is why KIE, which just crossed the $500 million asset mark, pulled in approximately $70 million on April 19 alone. KIE is equally weighted, with just over 2% of asset positions in Arthur J Gallagher, Brown & Brown, and Marsh & McLennan. The ETF was recently down 3.5% to start 2023.
Meanwhile, the Invesco S&P MidCap Quality ETF (XMHQ) added just over $150 million between April 23 and April 25 to push its asset base to over $650 million. XMHQ takes a similar approach as its large-cap sibling, the Invesco S&P 500 Quality ETF (SPHQ), by focusing on mid-cap companies with strong fundamentals based on return on equity, accrurals, and leverage. Holdings include Deckers Outdoor, Lattice Semiconductor, and Williams-Sonoma. XMHQ was up 4.6% for the year, as of late April.
Advisors who are looking for targeted equity exposure can likely find an ETF or two that meets their needs, as there are ETFs for many investment styles. They just need to do a little homework, and the tools VettaFi already offers and will soon integrate can help.
For more news, information, and analysis, visit the Innovative ETFs Channel.
Visualizations and data provided by LOGICLY, which is a wholly owned subsidiary of VettaFi.
