Top ETFs tracking the S&P 500 Index have performed strongly this year, attracting significant inflows amid the ongoing artificial intelligence boom and robust corporate earnings growth.
The Vanguard S&P 500 ETF (NYSE:VOO), State Street SPDR Portfolio S&P 500 ETF (NYSE:SPYM), and SPDR S&P 500 ETF (NYSE:SPY) jumped to a record high this week, bringing their year-to-date gains to 12.70%.
VOO, SPY, and SPYM Have Gained Billions in Inflows
They have also attracted billions of dollars in new assets this year. The SPYM ETF has recorded more than $52 billion in inflows, pushing its total assets to over $162 billion.
Similarly, Vanguard’s VOO has attracted approximately $85 billion in inflows and became the first fund to surpass $1 trillion in assets. Meanwhile, SPY has added about $12 billion in new assets this year.
The ETFs continued rising this week as the earning season gained momentum. FactSet (NYSE:FDS) data shows that 88% of companies in the S&P 500 Index have already released their second quarter earnings. The blended earnings growth so far is 50.4%. If this is the final figure, it will mark the best earnings growth rate since Q2’21 when it grew by 91.6%.
Most companies have released strong earnings numbers. Banks like Goldman Sachs, Morgan Stanley, and JPMorgan were boosted by the higher interest rates, mergers and acquisitions, and a surge in trading activity. Similarly, technology companies like Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), and Meta Platforms (NASDAQ:META) released strong earnings as the AI boom continued.
Other top companies that published strong numbers were popular names like SanDisk, Western Digital, and Seagate. These firms are in the memory industry, which is seeing strong demand and a supply squeeze. More companies like Cardinal Health, Cisco Systems, Aramark, and Applied Materials will release their numbers next week.
Most importantly, the S&P 500 Index and its ETFs are trading at bargain valuations. FactSet data shows that the 12-month P/E ratio stands at 20, slightly higher than the five-year average of 19.9. The ten-year average is 19.0.
S&P 500 Index crossed a crucial resistance level
The S&P 500 Index continued its strong rally and moved above the crucial resistance level of 7,615, its previous all-time high. Moving above that level confirmed the bullish outlook as it confirmed that bulls are in control.
The stock has remained above all moving averages, while the Average Directional Index (ADX) jumped to 19.7, its highest level since July 2nd. Therefore, the index will likely continue rising, potentially to 8,000. Such a move will boost the performance of its ETFs like SPYM, SPY, and VOO.
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