The results of the 2024 presidential election have certainly rocked the markets, and ETFs were no exception.
Using Bloomberg data, Scotia ETF Services reports that U.S. ETFs traded about $262 billion on Nov. 6, the day after the election. This represents the largest single-day trading volume for U.S. ETFs in months.
Financials and Small-Caps
When examining some of the U.S. ETFs that saw the largest spikes in trading volume, a few key themes come to mind. In particular, ETFs that focus on financials saw significant trading action following the election.
One such fund was the Vanguard Financials ETF (VFH ). The ETF leverages Vanguard’s extensive expertise to provide access to the U.S. financials sector. It comes with an attractively low net expense ratio of 10 basis points.
Another field in particular that received attention was small-caps. The SPDR Portfolio S&P 600 Small Cap ETF (SPSM ) saw especially strong trading action on the market yesterday.
SPSM remains one of the most-sought-after small-cap ETF products on the market. The fund offers small-cap growth with a low net expense ratio of 0.03%.
“In anticipation of a Republican administration and shifting control of Congress, investors turned to financials and small-caps,” noted Todd Rosenbluth, head of research at VettaFi. “Potential deregulation and tax cuts make many ETFs more appealing than before.”
Heading Abroad
While some traders sought to capitalize on domestic companies after the election, others set their gaze abroad. ETFs that provide access to international equities also saw robust trading volume on Wednesday.
The JPMorgan BetaBuilders Europe ETF (BBEU ) was one of the top performers in that regard. The fund provides investors with access to the European equity markets.
To do so, the fund uses an indexed approach across the developed countries in Europe. As a result, BBEU holds many recognizable European names, such as Nestle, Shell, Allianz, and AstraZeneca.
Regardless of exactly how investors view the election results affecting the markets, ETFs can offer a strategy for everybody. Traders looking to capitalize on a change in Federal leadership can look to financials and small-caps as potential options. Meanwhile, international equity ETFs can help others broaden their portfolios away from the U.S. market.
For more information, please visit VettaFi.com | ETF Trends.
