Fund flows are crucial in identifying the most promising exchange-traded funds (ETFs) for investors. Analyzing this metric can help us identify the best three ETFs to buy now. Fund flows help investors uncover valuable insights into market trends and investor sentiment.
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Essentially, fund flows measure the net movement of money into or out of an ETF during a specific period. This calculation hinges on the creation and redemption of ETF shares. ETF inflows occur when new shares are created to meet demand, increasing the fund’s assets under management (AUM). On the other hand, outflows happen when shares are redeemed due to sales, reducing the AUM. The resulting net fund flow—a balance between shares created and redeemed—offers a clear indication of an ETF’s popularity and performance.
Armed with this perspective, we turn to the TipRanks ETF Screener to spotlight the top three ETFs to buy now, based on fund flows.
iShares Bitcoin Trust ETF (IBIT)
The iShares Bitcoin Trust ETF (IBIT) is a passively managed fund that seeks to track the spot price of Bitcoin (BTC-USD). The ETF was started earlier this year and currently has $58.6 billion in assets under management (AUM) with fund flows of $741.4 million.
As the price of Bitcoin has soared this year, so has this ETF, with a more than 50% gain over the past six months.
J.P. Morgan Nasdaq Equity Premium Income ETF (JEPQ)
The J.P. Morgan Nasdaq Equity Premium Income ETF (JEPQ) is an actively managed ETF of U.S. large-cap companies from the Nasdaq-100 Index. The ETF has $20.9 billion in AUM with an expense ratio of 0.35%. Over the past year, JEPQ has surged by more than 20%. Analysts remain cautiously optimistic about JEPQ stock, with a Moderate Buy consensus rating based on 81 Buys and eight Holds. The average JEPQ price target of $64.67 implies an upside potential of 13.8% from current levels.
iShares Russell 2000 ETF (IWM)
The iShares Russell 2000 ETF (IWM) offers investors exposure to the Russell 2000 Index, a widely followed measure of small-cap U.S. stocks. The ETF has seen fund flows of $554 million and has $79.5 billion in AUM with an expense ratio of 0.2%. Over the past year, the IWM ETF has soared by more than 10%. Analysts remain cautiously optimistic about IWM stock, with a Moderate Buy consensus rating based on 1,264 Buys, 636 Holds, and 50 Sells. The average IWM price target of $278.97 implies an upside potential of 26.8% from current levels.
Key Takeaway
The higher fund flows in the IBIT ETF indicate increased investor interest in Bitcoin and cryptocurrency. Furthermore, based on this metric, top choices like the JEPQ and IWM emerge as compelling investment opportunities, each with robust fund flow activity and promising growth potential.
