On the flipside however, Emerging Markets ETFs continue to see strong inflows, as both Vanguard Emerging Markets (NYSEArca: VWO) and iShares MSCI Emerging Markets (NYSEArca: EEM) both saw net creations last week, taking in approximately $2 billion. This has been a recurring theme nearly every week in 2012 thus far.
SPDR Barclays Capital High Yield Bond ETF (NYSEArca: JNK) also took in nearly $500 million, and this also has been occurring in recent weeks, with portfolio managers largely moving away from treasuries and into higher yielding areas of the fixed income market.
On the outflows side, Vanguard Total Stock Market ETF (NYSEArca: VTI) and SPY both saw net outflows, with about $1.5 billion collectively flowing out of the two funds.
PIMCO Enhanced Short Maturity Strategy (NYSEArca: MINT), which is generally used as a cash substitute and placeholder for institutional managers, saw very heavy volume last week and net redemptions of over $300 million, a sign that cash is being deployed somewhere in the markets.
Also, amidst a rather sharp selloff in the Japanese Yen last week, CurrencyShares Japanese Yen (NYSEArca: FXY) saw both heavy trading volume and steep outflows, with more than $300 million exiting the fund (equivalent to about one-third of the assets in the ETF). Going into the week ahead, and with the VIX showing signs of life which means collective hesitation about the early 2012 equity rally among market participants, we would expect similar volatility shocks in weeks ahead as the Euro crisis still remains unresolved.