ETFs have increasingly grown in popularity as many investors utilize the nifty too to quickly weave in and out volatile market conditions.
In a recent research note, Deutsche Bank highlighted the huge volume traded in a small number of ETFs on Monday, and more importantly the trend of de-risk by selling high yield and buying US treasury ETFs. However, DB did note that this was most likely an “early in the month” rotation from a very large managed account platform, and these “portfolio adjustments” are generally made in a single day.
Specifically, DB highlighted the large outflows from iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG), the largest junk bond ETF, with 57 million shares traded on Monday, compared to its average daily volume of 23 million shares. Prior to Monday, HYG experienced 16 million shares redeemed in the past week.
Along the same theme, the SPDR Barclays High Yield Bond ETF (NYSEArca: JNK), the second-largest junk bond ETF, also saw outsized outflows, with 22.3 million traded on Monday, compared to its average daily volume of 4 million shares.
On the other hand, risk-off conservative plays witnessed hefty inflows as traders shifted over to safe-haven assets in a knee-jerk response to the volatility on Monday.
Among the standouts, the iShares 7-10 Year Treasury Bond ETF (NASDAQ: IEF) saw 23.8 million shares traded versus an ADV of 3.9 million shares. IEF has also seen 7.2 million shares created in the past week.
The iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT) witnessed 18.8 million shares traded versus ADV of 8.1 million shares.
The SPDR Barclays Intermediate Term Treasury ETF (NYSEArca: ITE) experienced 15 million shares traded versus ADV of only 77,000 shares.
The iShares TIPS Bond ETF (NYSEArca: TIP) traded 7 million shares versus ADV of 1 million shares.
The SPDR Portfolio Long Term Treasury ETF (NYSEArca: SPTL) saw 14 million shares traded versus ADV of 800,000 shares.
Lastly, the iShares 3-7 Year Treasury Bond ETF (NasdaqGM: IEI) witnessed 3.7 million shares traded versus ADV of 630,000 shares.
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