The S&P 500 tumbled 2.6% last week in what was the worst weekly performance for the benchmark U.S. index since 2012 as Argentina’s third sovereign debt default in less than 30 years and renewed fears about the health of Portugal’s banking system sent equities sliding.
Weakness in U.S. stocks did not keep investors from pouring cash into S&P 500 exchange traded funds last week. As of last Thursday, the SPDR S&P 500 ETF (NYSEArca: SPY) pulled in nearly$7.6 billion, impressive haul considering the index’s slack performance. [Bank Woes Haunt Portugral ETF Again]
“That includes $6.1 billion on July 30 — the most since September 2011 — which arrived a day before the Standard & Poor’s 500 Index dropped 2 percent for the biggest slump since April,” report Joseph Ciolli and Jacob Barach for Bloomberg.
SPY’s $7.6 billion haul last week roughly cut in half the ETF’s year-to-date outflows to $7.7 billions. The bulk of SPY’s outflows were seen earlier this year as the ETF has seen inflows in three of the past four months, according to Bloomberg. That includes $6.8 billion in July when the S&P 500 lost 2.2%.
Last week, SPY’s primary rivals, the iShares Core S&P 500 ETF (NYSEArca: IVV) and the Vanguard S&P 500 ETF (NYSEArca: VOO) added a combined $102 million. SPY and IVV are the largest and second-largest U.S. ETFs, respectively.
However, even as cash flows into S&P 500 ETFs, investors are pulling capital from some previously beloved sector ETFs. The Utilities Select Sector SPDR (NYSEArca: XLU) lost over $98 million last week while the Industrial Select Sector SPDR (NYSEArca: XLI) bled $455 million. XLI and XLU were two of the top-10 ETFs for inflows in the second quarter. Sector ETFs added almost $38 billion in the first half of this year. [Sector ETFs Swell in Size]
Other sectors are seeing departures as well. For example, the Vanguard Consumer Staples ETF (NYSEArca: VDC) lost $68.6 million last week as it slid 2.8%.
SPDR S&P 500 ETF Trust
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of SPY.
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.