Vanguard Total Stock Market ETF (NYSEArca: VTI) saw more than $200 million enter the fund as well, and being a total stock market index fund, it expresses the sentiment that managers are embracing broadly diversified “beta” type funds, likely not wanting to miss any further rally as it appears that many are in “risk on” mode.
In small caps, IWM lost over $1 billion last week to redemptions, and after logging an impressive run of relative outperformance versus larger caps in the past 3 months (IWM up 14.21% versus SPY up 6.09% in the trailing 3 month period), investment managers are possibly taking profits and rotating into other areas of the markets.
Some notable sector activity occurred last week as well that attracted our attention. It appears that institutional managers rolled into XLI (Industrials), XLE (Energy), and XLF (Financials) and out of XLP (Consumer Staples), XLU (Utilities), and XRT (Retail) as there were sizable volumes in all of the aforementioned funds and related creation/redemption activity after the fact.
Finally, on the commodity front, we saw iPath Commodity Index (NYSEArca: DJP) take in well over $200 million in new assets which equates to approximately 10% of the assets currently in the product. With DJP having a diversified weighting approach across various commodity segments with the following breakdown — energy (33.90%), agriculture (28.79%), precious metals (16.07%), industrial metals (14.92%), and livestock (6.32%) — it seems clear that investors are comfortable getting long things like oil (which has already had quite a run and is flirting with recent highs) and potentially averaging into precious metals such as gold and silver which have obviously taken a beating in recent weeks.
SPDR S&P 500
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Full disclosure: Tom Lydon’s clients own SPY.