ETF Asset Report of May

Wall Street made a strong comeback in May, reversing early April losses triggered by the “Liberation Day” tariffs. Positive trade developments, solid tech earnings and a resilient economy lifted investor sentiment and fueled the rally. The S&P 500 added about 4% over the past month (as of May 30, 2025), the Dow Jones gained 2.3%, the Nasdaq advanced 6.3%, and the Russell 2000 added 2.3%.

Easing Trade Tensions Provides Relief

Following the initial tariff-induced downturn, signs of trade de-escalation began to emerge. The United States temporarily reduced tariffs on Chinese goods from 145% to 30%, while China responded by lowering its retaliatory duties on U.S. imports from 125% to 10%. This 90-day reduction period has helped ease investor concerns.

Additionally, President Trump postponed a 50% tariff hike on EU goods, delaying implementation from June 1 to July 9. This move accelerated trade negotiations with European partners.

Economic Resilience Supports Market Strength

Encouraging economic data further supported the bullish tone. Consumer confidence improved in May after five consecutive months of decline. Inflation also eased, with the Consumer Price Index (CPI) rising just 2.3% year over year in April — the lowest reading since February 2021.

Meanwhile, the labor market remained strong. The U.S. economy added 177,000 jobs in May, surpassing expectations, while the unemployment rate held steady at 4.2%. These figures reassured investors of continued economic stability.

Strong Tech Earnings Lead the Charge

First-quarter earnings reports from 477 S&P 500 companies showed an 11.4% increase in profits compared to the same period last year, with revenues up 4.4%. Approximately 74.2% of companies exceeded earnings per share (EPS) expectations, and 62.9% surpassed revenue estimates, according to the latest Earnings Trends.

While some sectors struggled, the technology sector stood out. Tech companies reported strong earnings growth, with revenue beats exceeding the five-year average — bolstering market optimism.

Ongoing Risks and Elevated Valuations

Despite recent gains, risks remain. Uncertainty over Trump’s tariff policies persists, especially after some tariffs were deemed unlawful in court, only to be reinstated temporarily on appeal. This legal tug-of-war has added market volatility.

Moreover, the rapid rebound has pushed valuations higher. The S&P 500 is now trading at over 22 times projected 2025 earnings. Analysts warn that without sustained positive developments, such high valuation levels may be difficult to maintain.

Against this backdrop, below we highlight the ETFs that fetched and lost sizable assets in the month of May.

S&P 500 & Nasdaq Top

Vanguard 500 Index Fund VOO, Invesco QQQ QQQ and Invesco NASDAQ 100 ETF (QQQM) hauled in $12.69 billion, $7.74 billion and $2.30 billion in assets, respectively. However, iShares Core S&P 500 ETF (IVV) and SPDR S&P 500 ETF Trust (SPY) witnessed outflows of $14.51 billion and $4.66 billion.

Bitcoin Gains Assets

iShares Bitcoin Trust IBIT attracted about $6.8 billion. Bitcoin has been an area to watch lately, given the rise in cryptocurrency prices. After suffering for several weeks amid tariff-related uncertainty, Bitcoin gained solid momentum in May. The world’s largest cryptocurrency soared to a new all-time high of more than $111,000, as renewed institutional enthusiasm and regulatory optimism continue to drive demand for the cryptocurrency. 

High-Yield Corporate Bonds Win

iShares iBoxx USD Investment Grade Corporate Bond ETF LQD gained about $3.52 billion in assets in May. Notably, LQD yields 4.45% annually. 

International ETFs: Investor Favorite

iShares MSCI EAFE Value ETF EFV amassed about $3.45 billion in assets.  Wall Street has underperformed both European and Chinese markets in the early phase of this year.According to Christopher Wood, Global Head of Equity Strategy at Jefferies Financial Group Inc., as quoted on Bloomberg, the market value of U.S. stocks, as a percentage of the MSCI All Country World Index, hit an all-time high in late December. The undervaluation of some international markets has boosted the asset inflows to those segments.

Ultra-Short-Term Bond ETFs Bleed

As risk-off segments moved back in May, safer assets like ultra-short-term bond ETFs bled.SPDR Bloomberg 1-3 Month T-Bill ETF BIL and iShares Short Treasury Bond ETF SHV lost about $4.2 billion and $2.6 billion in assets, respectively.

Gold Loses As Well

SPDR Gold Shares ETF GLD lost about $2.10 billion in assets in May as the safe-haven demand for the metal lost appeal.

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This article originally published on Zacks Investment Research (zacks.com).

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