These are the most popular ETFs among investors heading into March

Published Tue, Feb 28 20232:06 PM EST

February's reversal for stocks and renewed climb higher in benchmark interest rates resulted in more cautious investors, as shown by some of the month's most popular ETFs. The competition from juicy yields in the Treasury market and other asset classes perceived as safe resulted in a weak month for equity ETFs overall, according to Strategas ETF strategist Todd Sohn. "There's still a day to go, but February flows are probing their lowest intake since April 2022 – on one hand, supportive from a contrarian perspective (a lack of belief in underlying trend improvement), but on the other, reflective of subdued demand for stocks with capital competition growing and macro risks still present (e.g. geopolitical tensions)," Sohn said in a note to clients on Tuesday. Still, some funds proved big winners in that cautious environment. The list of the most popular equity ETFs for the past month, measured by net inflows, shows a defensive tilt and suggests investors 'appetite for income funds remains strong. The Vanguard Value ETF (VTV) was the top equity fund, attracting nearly $2.7 billion of inflows. The fund, which has an expense ratio of just 0.04%, can be a simple and cheap way for investors to shift out of riskier parts of the stock market and into more defensive sectors. The next two funds on the list are from JPMorgan, including one red hot income fund. The JPMorgan Equity Premium Income ETF (JEPI) , whose use of options helped push its yield above 10% in 2022, raked in more than $2 billion last month. The fund still reports a 30-day SEC yield of 11.15%, as of Jan. 31. JPMorgan's BetaBuilders Europe ETF (BBEU) also attracted more than $2 billion of inflows, and also fits into the defensive and income themes. The fund's top holdings include several large health care companies, and it has a 30-day SEC yield of 2.91%. Other popular income funds include the Schwab US Dividend Equity ETF (SCHD) and the Pacer US Cash Cows 100 ETF (COWZ) . Both funds have an average annual total return of more than 11% over the past five years. Among sectors, financials were popular with investors, led by the First Trust Financials AlphaDEX Fund (FXO) , which has a solid long-term track record compared to some of the cheaper sector funds tracking the industry. Outside of equity funds, the hunt for yield showed up in demand for short-term bond ETFs . The iShares Short Treasury Bond ETF (SHV) was at the top, with more than $4 billion in inflows over the past month.