The SPDR S&P 500 ETF Trust (NYSE: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 (NASDAQ:AAPL) at 7.9%, Microsoft Corp. (NASDAQ:MSFT) at 7%, Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) at 3.9%, Amazon.com, Inc. (NASDAQ:AMZN) at 3.1%, and NVIDIA Corporation (NASDAQ: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 (NASDAQ: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 (NYSE:DIA) recorded $232 million in net inflows last month, following five consecutive months of outflows.
- The SPDR Gold Trust (NYSE: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 (NYSE:VTV) witnessed $3.75 billion in outflows. The Vanguard Growth Fund ETF (NYSE:VUG) posted $1.5 billion in inflows.
- Investors withdrew money from the Energy Select Sector SPDR Fund (NYSE:XLE) and the Financial Select Sector SPDR Fund (NYSE:XLF), which saw outflows of $1.6 billion and $2.4 billion, respectively.
- Inflows were recorded by the Communication Services Select Sector SPDR Fund (NYSE:XLC) at $636 million and the Technology Select Sector SPDR Fund (NYSE:XLK) at $23.5 million.
- Finally, iShares Core U.S. Aggregate Bond ETF (NYSE: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 |
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