Vanguard, iShares ETFs Stand Out in June, While Schwab Sees More Outflows

The top-performing ETFs in the global market portfolio were Vanguard products: the Total World Stock ETF, up 3.07%; Total Bond Market ETF, up 0.67%; and Total International Bond ETF, up 0.54%.

Best-performing U.S. stock ETFs came from iShares: the Core S&P Total US Stock Market ETF, up 2.30%; Core S&P 500 ETF, up 1.89%; Core S&P Mid-Cap ETF, up 1.33%, and the Core S&P Small-Cap ETF, up 3.61%.

The top-performing international stock ETF was the iShares Core MSCI EAFE ETF, up 3.25%; while the best bond fund was iShares Core US Aggregate Bond ETF, up 0.66%.

Emerging market stocks outperformed both developed international and U.S. stocks, but many of the ETFs have lost ground to U.S. stocks in recent years, Johnson noted.

U.S. small-cap ETFs outperformed both large- and mid-cap ETFs in June, although small-caps still lag behind those groups over the five-year period, he said.

Other Winners and Losers

• Although most bond market sectors recovered from first-quarter losses by the end of June, high-yield markets are “the notable exception,” Johnson writes. In May, the Federal Reserve began buying corporate bond ETFs as a way to backstop the bond market, purchasing 16 different ETFs with total market value of $6.8 billion by June 16.

• Bond funds boomed with fixed income ETFs taking in a record $33.5 billion in net new flows. Over the past three months, fixed income ETFs have net flows of $84.5 billion, the largest three-month net flow on record.

• Strategic-beta ETFs had a mixed showing vs. the broader stock market.

• Value-oriented funds continued to struggle on a relative basis while momentum stocks have been “resilient.”

• Physical gold ETFs continued to gain assets, with the SPDR Gold Shares seeing $3.2 billion in net new inflows in May, the seventh straight month of net new inflows.

• The energy sector may have turned the corner, Johnson says, although as oil prices rallied, energy stocks stalled. Many energy ETFs still are trading at a deep discount, he says.

• Some undervalued ETF areas include cannabis and oil service and equipment. Overweighted ETFs may be on the technology side, as those stocks have been on a tear due to the worldwide lockdown, which forces people to use technology even more, Johnson says.

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