Investors Sell In May And Go Away – Weekly ETF Fund Flows

| May 6, 2013 | 0 Comments

fund flowsToday we’re taking a look at ETF fund flows in – iShares Russell 2000 (IWM), ProShares Ultra Russell 2000 (UWM), iShares Barclays 3-7 Year Treasury Bond (IEI), and ProShares Ultra 7-10 Year Treasury (UST).

ETF fund flows are a valuable indicator of what traders are thinking. It takes a lot of buying or selling to drive millions of dollars into or out of individual ETFs.

These flows are something traders use to find trends and gauge investor sentiment. And it can help you pinpoint which ETFs could be next to make a big move higher or lower.

Let’s take a look at four ETFs that led the way in net inflows and net outflows from April 29th to May 3rd.

iShares Barclays 3-7 Year Treasury Bond (IEI) led all ETFs with $1.4 billion in inflows last week. IEI now has $3.6 billion in assets under management.

IEI is currently trading for $123.77. It’s up 1.7% from the 52-week low of $121.65 and it has recently fallen 0.4% from the 52-week high of $124.27.

And IEI wasn’t the only Treasury bond fund seeing a large amount of inflows.

Before last week, ProShares Ultra 7-10 Year Treasury (UST) had about $12 million in AUM. But a whopping $1 billion in inflows last week made UST the fund with the second most inflows for the week.

The $2.4 billion of cash that flowed into these two ETFs isn’t something regular investors are driving. Nope, this type of volume in Treasury ETFs is institutional investors buying.

These institutional buyers were likely moved to buy Treasuries in the middle of the yield curve after the most recent statement from the Federal Reserve. In short, the Fed isn’t going to stop buying bonds even though stocks are at all-time highs.

On the other hand, the ProShares Ultra Russell 2000 (UWM) led all ETFs with more than $959 million in outflows. The majority of the volume came on the first day of May when stocks were selling off across the board.

UWM is currently trading at $57.95. It’s up 72% from the 52-week low of $33.65 and just shy of the 52-week high of $58.12.

And UWM wasn’t the only ETF that tracks the Russell 2000 small cap index that investors sold. iShares Russell 2000 (IWM) was up near the top of the list with $652 million in redemptions as well.

The total outflow of more than $1.5 billion out of these two ETFs is a strike against small-cap stocks.

But it’s not the end of the world…

Don’t forget that the majority of volume came in on May 1st. The large outflows were likely tied to the ‘Sell in May and go away’ crowd.

Like I’ve said before, stocks can and will go up and down for lots of reasons. But just because it’s May isn’t one of them. So don’t let the outflows from stock ETFs to start May scare you away from stocks.

That wraps up this week’s ETF fund flows…

Keep in mind, there’s a lot of information about ETF fund flows. And it can be a very useful tool as long as you know what you’re looking for.

Good Investing,

Corey Williams

 

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Category: ETFs, Index ETFs, Market Analysis, What's Going On?

About the Author ()

Corey Williams is the editor of Sector ETF Trader, an investment advisory service focused on profiting from ETFs and the economic cycle. Under Corey’s leadership, the Sector ETF Trader has become one of the most popular and successful ETF advisories around. In addition to his groundbreaking service, Corey is the lead contributor to ETF Trading Research, where he shares his insights about ETFs and financial markets three times a week. He’s also a regular contributor to the Dynamic Wealth Report and the editor of one the hottest option trading services around – Elite Option Trader.

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