Investors, Options Traders Turn Bearish on Small-Cap ETFs

December 28th at 11:48am by Paul Weisbruch, Street One Financial

Consistent put volume continues to be the theme in U.S. Small Cap equities, as evidenced by the heightened activity in iShares Russell 2000 (NYSEArca: IWM) and the bearish looking activity is carrying over into Creation/Redemption land as IWM is the leader in net outflows over the past one week period (-$1.1 billion).

Conversely, we continue to see more call buying than put buying in iShares MSCI Emerging Markets (NYSEArca: EEM), and the fund has held steady near its highest levels in 2012 despite the recent equity market turbulence. Fund flows would suggest that investors are still allocating to the EM space via EEM as the fund has attracted more than $900 million in recent sessions in net inflows.

In general, there has been continued institutional investor appetite recently for “international equity” based ETFs, as FXI (iShares FTSE China 25), EFA (iShares MSCI EAFE), and EWJ (iShares MSCI Japan) for example appear among the recent leaders in net asset inflows across all ETFs.

On the flipside, Technology has taken the brunt of the recent sell-off in terms of asset outflows as well as price action, and QQQ (PowerShares QQQ Trust) has lost more than $500 million accordingly.

Specific equity sector ETFs including XLP (SPDR Consumer Staples), XLE (SPDR Energy), GDX (Market Vectors Gold Miners), KBWB (PowerShares KBW Bank) and XRT (SPDR S&P Retail) have seen larger outflows recently as well.

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

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