ETFs Flows to Watch: SPY Attracts Staggering $18B Inflows in May, The Highest Since December 2021, As Investors Jump On AI Rally

Zinger Key Points
  • The world's largest exchange traded fund with exposure to the S&P 500 index has the best inflows since December 2021.
  • Value ETFs and value-related sectors witness withdrawals, as investors flock to tech and AI-related industries.

The SPDR S&P 500 ETF Trust SPY experienced an outstanding $18.1 billion in net inflows in May, the greatest flow performance since December 2021, when the fund received $25.6 billion, according to Koyfin data.

The ETF is the world's biggest with approximately $400 billion in assets under management.

The influx into the largest ETF tracking the S&P 500 index corresponded with a remarkable rise in AI-related stocks and the rising dominance of tech giants among the 500 most capitalized U.S. firms

Tech Supremacy: The technology and communication services sectors account for around 37% of the total S&P 500 index. Within this niche, the combined weight of five tech titans accounts for around 25% of the index: Apple Inc AAPL at 7.9%, Microsoft Corp. MSFT at 7%, Alphabet Inc. GOOG GOOGL at 3.9%,, Inc. AMZN at 3.1%, and NVIDIA Corporation NVDA at 2.7%. An equally weighted portfolio made up of these five S&P 500 heavyweights would have gained 62% so far in 2023, compared to the 9.7% performance of the market. 

As these stocks gathered speed and rose in relative weight, investors seized the opportunity to profit from a potential AI boom.

Other ETFs Flows To Know: The Invesco QQQ Trust Series 1 QQQ, the biggest ETF tracking the Nasdaq 100 index, witnessed $1.8 billion in net inflows last month, the best monthly performance so far in 2023. 

  • The SPDR Dow Jones Industrial Average ETF Trust DIA recorded $232 million in net inflows last month, following five consecutive months of outflows. 
  • The SPDR Gold Trust GLD, printed $873 million in net inflows in May, the highest since March 2022. 
  • Value-oriented ETFs had withdrawals, while growth-oriented ETFs saw inflows. The Vanguard Value Index Fund ETF VTV witnessed $3.75 billion in outflows. The Vanguard Growth Fund ETF VUG posted $1.5 billion in inflows.
  • Investors withdrew money from the Energy Select Sector SPDR Fund XLE and the Financial Select Sector SPDR Fund XLF, which saw outflows of $1.6 billion and $2.4 billion, respectively. 
  • Inflows were recorded by the Communication Services Select Sector SPDR Fund XLC at $636 million and the Technology Select Sector SPDR Fund XLK at $23.5 million.
  • Finally, iShares Core U.S. Aggregate Bond ETF AGG, the largest ETF tracking investment-grade U.S. bonds, had $3.2 billion in net inflows, the highest since February 2022 and the third largest monthly flow ever. 
ETF AUM Flows in May 2023
SPDR S&P 500 ETF Trust $397bn $18.1bn
iShares Core U.S. Aggregate Bond ETF $91.1bn $3.2bn
Invesco QQQ Trust $189bn $1.8bn
Vanguard Growth ETF $86bn $1.5bn
SPDR Gold Trust $59.3bn $0.87bn
Communication Services Select Sector SPDR Fund $12.3bn $0.64bn
SPDR Dow Jones Industrial Average ETF Trust $27.7bn $0.23bn
Technology Select Sector SPDR Fund $47bn $0.02bn
Energy Select Sector SPDR Fund $33bn -$1.6bn
Financial Select Sector SPDR Fund $28.6bn -$2.4bn
Vanguard Value ETF $94.5bn -$3.8bn

Read now: Short Interest Sector Focus: Consumer Cyclical Sector

Photo: Shutterstock


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