Many investors have grown more confident in June’s stock market rally, and some are now betting that the next leg up will include a wider group of winning stocks. The Invesco S & P 500 Equal Weight ETF (RSP) attracted $1.4 billion in new money over the past week, making it one of the five most popular exchange-traded funds during that time, according to FactSet. The fund puts an equal amount of money into each stock in the S & P 500 and is rebalanced quarterly, diluting the effect of the biggest companies. This year’s market rally has been dominated by large tech stocks, particularly those such as Nvidia , Alphabet and Microsoft that are seen as artificial intelligence plays. As a result, the S & P 500 has become even more concentrated in just a handful of large stocks, leading some Wall Street strategists to caution that the rally was too narrow to sustain itself . However, there are some signs the rally has broadened out this month, which would benefit more balanced funds such as the RSP. Through Thursday, the RSP was up about 4.6% in June compared with 4.5% for the SPDR S & P 500 ETF Trust (SPY) . While the number of stocks at all-time highs remains small, the ratio of advancing-to-declining stocks in the S & P 500 provides some reason for optimism. “Despite what many consider the market’s limited participation, the A/D index for the S & P has reached an all-time high [recently]. Note this is for the S & P components, not all NYSE stocks, which is what we typically reference. It’s not unusual to see a discrepancy in these numbers, it’s again about progress not perfection,” Wellington Shields technical analyst Frank Gretz said in a note to clients. RSP 1M mountain The RSP has advanced in June, keeping pace with the S & P 500. The RSP, which has an expense ratio of 0.20%, has a total return of about 4.4% year to date, well below the S & P 500. Here is the full list of top five ETFs by fund flows over the past week, according to FactSet. The data is through Thursday. Here are some notable stats from the week: SPY saw a big inflow this week, partially reversing a big outflow the prior week . The stark week-to-week change suggests factors such as rebalancing by large traders entering and exiting long- and short positions are affecting the flows data. The $1 billion pulled in by the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) meant it was now net positive in year-to-date flows. Similarly, the Vanguard Intermediate-Term Corporate Bond ETF (VCIT) brought in more than $400 million over the past week.
This story originally appeared on CNBC
