The Select Sector SPDRs exchange traded funds (ETFs) cover broad, general sectors of the market. Billions of dollars move into and out of those funds each week. A total of nearly $21.8 billion was invested in the Sector SPDRs at the end of the third quarter, which is an increase of 11.2% from the previous quarter. These ETFs and the percent change in their number of shares outstanding for the months of August to September, according to Index Universe, include:

  • Materials Select Sector SPDR (XLB) – 16%
  • Health Care Select Sector SPDR (XLV) – 5%
  • Consumer Staples Select Sector SPDR (XLP) – 15%
  • Consumer Discretionary SPDR (XLY) – 42%
  • Energy Select Sector SPDR (XLE) – -13%
  • Financial Select Sector SPDR (XLF) – -22%
  • Industrial Select Sector SPDR (XLI) – 14%
  • Technology Select Sector SPDR (XLK) – 7%
  • Utilities Select Sector SPDR (XLU) – 8%

As shown, investors significantly increased their exposure to the consumer market through both XLP and XLY while they decreased their exposure to XLF and XLE. The overall increase in long interest on the SPDRs only tells half of the story though. They’re also used often as shorting tools. Short interest for all the SPDRs fell from 53% in August to 42% in September. XLF had the highest short interest in September at 118.5%, followed by XLE at 78.7%. XLK had the lowest level of short interest at 5.7%, followed by XLV at 8.4%.

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.