Tag: Vanguard S&P 500 ETF (VOO)

This ETF King Continues To Lose Funds

Posted on by Matt Thalman

Year-to-date, the largest exchange-traded fund by assets under management, the SPDR S&P 500 ETF (SPY), has seen an astonishingly large amount of money flow out of the fund.

Remind you; this is also when the S&P 500, and thus SPY itself, is up 7.09% year-to-date. That is important to note because it highlights that the fund does not necessarily see money leave the fund when the market is getting hit.

The SPY has over $372 billion in assets under management, making it the single largest ETF. SPY also holds the crown of being the most liquid, which may not mean much to the average investor, but that is very important to Wall Street professionals and prominent investment managers.

Liquidity is important because it means these investment managers can get in and out of positions with no genuine concern about whether or not there is a buyer or seller on the other side of their trade.

So how much money has SPY seen leave since the start of 2023? $9.43 billion!

Let that sink in and think about the fact that only about 150 Exchange-traded funds in the US have more than $9 billion in assets under management. That is 150 out of the 3,126 ETFs that investors have to pick from.

SPY lost more assets in three and a half months than nearly 3,000 funds have period.

Why is the money flowing out of SPY?

Unlike during other times when we see significant outflows of ETFs, so far in 2023, it has not been because the market is declining. Typically when the market is in a downturn, we see outflows occur as investors pull their money from risk assets and put it into reduced-risk assets. Think about pulling money out of stocks and putting it into bonds. Continue reading "This ETF King Continues To Lose Funds" →

Gap Offers Opportunity

Posted on by Aibek Burabayev

The global stock market's market distortion was revealed last week. Let me share it with you in visual form below.

I put together three ETFs: Vanguard S&P 500 ETF (NYSEARCA:VOO) in the blue line representing the S&P 500 broad U.S. stock index; Vanguard Total World Stock ETF (NYSEARCA:VT) in the black line representing the global stock market and Vanguard FTSE All-World ex-US ETF (NYSEARCA:VEU) in the red line representing the stock market outside of the United States.

Vanguard VOO VT VEU Monthly

Source: TradingView

The first chart above depicts the price dynamics since September 2010. Over this long period, the US stock market has outperformed both the global market and the rest of the world.

VOO received +257%, VT received +107%, and VEU received only +21%. Indeed, the gap is huge.

Smart money waits for a market crash before adding or purchasing stocks. In this regard, I've created a new chart below to show how these three instruments have performed from the deep valley in 2020 to the top of 2021. Continue reading "Gap Offers Opportunity" →

The Thanksgiving Rally Should Not Be Trusted

Posted on by Matt Thalman

The market rally during the shortened holiday trading week of November 21st-25th should not be trusted just yet.

The Dow Jones Industrial Average rose 1.78% during the week, the S&P 500 increased by 1.53%, and the technology-heavy NASDAQ grew by 0.72%.

The move higher came for several reasons, but none materially changed the economy's outlook over the coming six to twelve months.

The biggest news was from the Federal Reserve. The Fed's meeting minutes from their November 1st and 2nd meeting pushed prices higher after several Fed members expressed interest in slowing the pace of rate hikes during future meetings.

Just the fact that the Fed is talking about reducing the amount of their rate increases is significant, and many economists applaud this move. Economists are happy with this because the Feds policy changes have a lag, meaning it takes time for rate increases to show in economic data reports.

The concern has been the Fed is raising rates too quickly, and by the time the lag sets in, the economy will be in the dumps. So, slowing the pace today is a possible way the Fed can avoid running the economy into the ground. Not running the economy into the ground is the "soft landing" we often hear about when people refer to the Fed and its current policies.

Another catalyst for the recent move higher was the Consumer Price Index in October, which was up 7.7% from a year ago. This was the lowest CPI reading increase since January of this year. But, let's be honest, a 7.7% increase year-over-year is still ridiculously high inflation.

However, many economists are actually saying they are seeing inflation leveling out. We aren't yet seeing that happen with the CPI numbers because we are still looking at year-over-year comparables before inflation got out of control.

The true sign that inflation has slowed, or is still climbing, will be in 2023 when we see year-over-year comps comparing current inflation measures with the elevated inflation we began seeing in early 2022. Continue reading "The Thanksgiving Rally Should Not Be Trusted" →

SPY Set To Lose Its Crown

Posted on by Matt Thalman

Since 2017, the King of the Exchange Traded Fund world has slowly been losing ground to its closest competitors.

The SPDR S&P 500 ETF Trust (SPY), the undisputed ETF King since ETFs became popular, is set to lose its crown within the next few years. Well, perhaps it would be better to say that it will lose one of its crowns or maybe one of its world titles while still holding a few others. Let me explain...

The SPY ETF is and has been, with the exception of just a handful of months over the last 20-plus years, the largest Exchange Traded Fund in terms of assets under management. Currently, SPY has $365 billion under management.

In contrast, the next closest competitor, iShares Core S&P 500 ETF (IVV), has $298 billion, and then there is the Vanguard S&P 500 ETF (VOO) at $264 billion in assets.

The SPDR ETF has more than $65 billion in assets compared to the second largest ETF and more than $100 billion compared to the third largest ETF. So why are there predictions that its competitors will overtake it in the coming years?

First and foremost, since 2017, it has been losing ground to IVV and VOO, and based on results from the first half of 2022, the trend doesn't appear to be changing. VOO has added $29.2 billion in assets year-to-date, while IVV has added $15.7 billion. On the other hand, SPY has lost $22.7 billion. Continue reading "SPY Set To Lose Its Crown" →

Play The Current Housing Boom With ETFs

Posted on by Matt Thalman

Unless you've been living under a rock, you know that the housing industry is booming. Inventory is low, and prices are high! Over asking is now a standard term and contingency waivers are the only way you win those bidding wars with other buyers. Oh, and not to mention, if you find a house for sale, you better see it the first day it is listed, or you can forget about ever getting a chance because the number of days on the market is essentially zero at this point.

So how can you invest in this market without having to deal with this headache of a situation and risk overpaying for an asset class that historically only goes up 2% year-over-year?

Enter the world of Exchange Traded Funds!

There are several Exchange Traded Funds that you can buy today that will give you access to the businesses that are not only performing well right now but are still drooling at the current prospects that lay in front of them. In particular, the home builders. Continue reading "Play The Current Housing Boom With ETFs" →