Recent ETF flow patterns show investors are getting a little nervous. They’re worried about the spike in interest rates and that the equity rally is getting a bit long in the tooth.

For example, long-only ETFs have experienced a rare outflow the past month while investors plowed money into leveraged and inverse funds that are popular as hedging strategies.

“The quarter did start off with very strong inflows, to the tune of $35.3 billion in the first three weeks. Over the last month, however, money flows have done a U-turn, with ETFs losing $6.3 billion as investors redeem their holdings,” says Nick Colas, chief market strategist at ConvergEx Group.

In particular, investors have been dumping U.S. stock ETFs the past 30 days with the category seeing net redemptions of $7.3 billion. Fixed-income ETFs have experienced outflows of $3.5 billion as interest rates rise.

“Surprise: International  equities are the bright spot over the last 30 days, with $2.8 billion in fresh money at a time investors are otherwise heading for the exits,” Colas wrote in a note Wednesday. “Too early to claim of change in sentiment away from long-favored U.S. stocks, but something to watch over the second half of Q3 2013.”

There are currently more than 1,500 exchange traded products listed in the U.S. with about $1.5 trillion of assets.

“ETF money flows show where investors of all stripes are focusing their attention at any given time,” Colas said. “The ETF industry typically gathers assets like a car with cruise control gobbles up highway miles – steadily and reliably.”

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