Nearly $6 billion was taken out of exchange traded funds (ETFs) during the month of February, the first time ETF fund flows have been negative in nearly a year. The outflows are centered on one fund in particular.
The stronger trends seen in December 2008 and January 2009 have been reversed, according to new data released by National Stock Exchange. During those stronger months, more than $8 billion had been acquired by ETFs. Sadly, the bulk of outflows was seen in SPDR S&P 500 (SPY), which took $13.6 billion in net outflows, reports Index Universe staff.
PowerShares QQQ (QQQQ) was another fund that saw high outflows, which is heavily traded by institutional investors. In February, the QQQ’s had net outflow of $724 million.
It looks like selling has finally hit ETFs. Outside of some flashes of brilliance within the precious metals area, almost all asset classes are down below their 200-day moving averages. This isn’t surprising.
It’s nothing against ETFs, though. They’re doing what they should. This news is just a good indicator of market sentiment. As advisors and intelligent self-directed investors lighten up on their positions, it translates into slipping investor confidence.
By the end of February, there were 843 ETFs and ETNs, down from 856 in January. Total assets were $461 billion, down from $505 in January.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.