Resilient ETFs As Equities Pull Lower From Record Highs

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Exchange-Traded Funds (ETF) have been on a roll as investors look to diversify their investment portfolios. The diversified nature of these investment vehicles has proved to be highly reliable and resilient amid the elevated volatility levels in the market.

Bond ETFs in Focus

Capital inflows into exchange-traded funds have continued to edge higher as investors eye a piece of the stock market that shows no signs of slowing down. While the focus for the longest time has been on equity ETFs, bond ETFs also continue to offer exciting investment opportunities even on bonds coming under pressure in recent months.

iShares TIPS Bond ETF is one such ETF that has continued to outperform the overall market. The ETF has seen over $260 million in capital -inflows in recent months affirming strong interest from buyers. It is not the only bond ETF to elicit strong interest from investors. The ETF tracks investment results of the Bloomberg Barclays U.S. Treasury Inflation-Protected Securities (TIPS) Index (Series-L). The index is comprised of inflation-protected U.S Treasury bonds.

iShares Short-term Corporate Bond ETF has seen over $90 million in capital inflows over the past year. The ETF provides broad exposure to investment-grade corporate bonds that the Federal Reserve has committed to buy.

The iShares National Muni Bond ETF (NYSEArca: MUB), on the other hand, has seen over $80 million in capital inflows. The Bond ETF provides investors with exposure to the investment-grade segment of the U.S Municipal bonds.

Invesco ESG ETF

Bond ETFs are not the only ones attracting bids in the vast bond markets. ESG ETFs are also becoming a key component of the vast bond market amid growing interest in sustainable investing. ESG Bonds remain in strong demand as depicted by increased capital inflows on investors looking to have some impact with their investments.

Buoyed by the strong demand, Invesco has expanded its portfolio of ESG focused ETFs with the launch of two new funds. The funds will cover listed companies in Japan and the Pacific region. MSCI Japan Universal Screened Ucits ETF and Invesco MSCI Pacific ex-Japan ESG Universal Screened Ucits ETF are the two new funds.

The ESG ETF comes with an ongoing fund charge of 0.19% and will be listed on the London Stock Exchange. The two ETFs are ESG momentum-driven that will provide investors with exposure to companies that are actively improving their ESG credentials.

Consumer and industrial ETFs are also in the spotlight, on a number of equities racing to record highs over the past week. Tesla racing to new highs of $900 a share has once again shone a light on some ETFs. Ark Industrial Innovation ETF (NYSEArca: ARKQ) is one of the ETFs offering exposure to the electric vehicle giant.

ARKQ ETF has more than doubled in value in the wake of Tesla stock shuttering records in 2020. Likewise, the ETF has started the year on a roll as Tesla continues to rally.


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