Institutional investors have been using exchange traded funds for short-term trades in a choppy market, according to the latest flow data, which means ETF buying and selling patterns can be volatile on a weekly basis.
A total of $5.9 billion was pulled from equity focused funds in the latest week., as U.S. investors fled domestic funds, reports Reuters. A bulk of the assets withdrawn were extracted from exchange traded funds, according to Thompson Reuters Lipper.
“We’ve seen a lot of disproportionate pulling out or putting in via ETFs,” Tom Roseen, a senior analyst with Lipper in Denver, said. “A lot of people are using ETFs for short-term trading purposes. Big moves like that, we can call it institutional in nature.” [ETF Flows Driven By Volatility, Debt Crisis]
Of the $4.2 billion withdrawn from domestic funds, $2.7 billion of it was pulled from ETFs. Among the four large ETFs with sizable outflows, $1.29 billion was pulled from the iShares Russell 2000 (NYSEArca: IWM), SPDR S&P 500 (NYSEArca: SPY) lost $800 million, iShares MSCI Emerging Markets (NYSEArca: EEM) lost $647 million, and the iShares Russell 1000 Growth (NYSEArca: IWF) gave up $594 million. [Investing in Corporate America with ETFs]
A trend is seen with investors gravitating back in the bond market, Lipper reported, as municipal bond funds gained for 11 of the 13 weeks in the quarter, and taxable bond funds took in $1.6 billion this week. [Broad Market, ETFs in Mix Trading After Fed Announcement]
Commodity and currency ETFs suffered outflows, as markets rallied on renewed positive sentiment for the Eurozone this week. The classic safe haven funds such as the Rydex CurrencyShares Swiss Franc Trust (NYSEArca: FXF) and the SPDR Gold Shares (NYSEArca: GLD), which lost $258 million, suffered outflows as investors ventured back into fixed income. [ETF Redemptions Highest Since 2008: Report]