SPY, VWO – Weekly ETF Fund Flows
Today we’re taking a look at ETF fund flows in– SPDR S&P 500 (SPY) and Vanguard FTSE Emerging Markets (VWO).
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.
This is something traders can 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 the two ETFs that led the way in net inflows and net outflows from April 1st to April 5th.
SPY led the way with the most shares created last week. More than $1.2 billion in fresh capital flowed into SPY. No doubt about it, that’s a big number…
Don’t forget that the SPDR S&P 500 is the largest ETF with more than $131 billion in assets under management. So a $1.2 billion fluctuation is merely 1% of the ETF.
SPY is currently trading for $155.66 per share. The ETF is up 25% from the 52-week low of $124.37 and is just shy of the 52-week high of $157.21.
Here’s the thing…
Last week was an up and down week for stocks. Despite the turbulence, SPY along with Vanguard Growth (VUG) and SPDR Dow Jones Industrial Average (DIA) were the three ETFs with the biggest inflows.
I’m sure you’ll agree, strong inflows into ETFs that hold large cap US stocks is a clear indication bullish momentum is still alive and kicking.
On the other hand, Vanguard FTSE Emerging Markets ETF (VWO) led the way with the most redemptions last week. More than $928 million flowed out of VWO last week.
This emerging markets ETF is focused on stocks from places like China, Brazil, Taiwan, and South Africa. It’s considered to be a riskier ETF with the potential for big swings in share price.
VWO is currently trading for $41.94 per share. The ETF is up 16% from the 52-week low of $36.07, but it’s down nearly 8% from the 52-week high of $45.48.
The outflow isn’t surprising given the headlines from last week. The madman over in North Korea certainly gave investors a reason to sell emerging markets.
In my opinion, the outflow from emerging market ETFs may be a contrarian indicator…
This is a case where negative news has driven investors out of emerging market ETFs. But the likelihood of North Korea actually inciting a war are slim and none.
Once the situation blows over, we’ll likely see investors pour back into emerging market ETFs. Simply put, the influx will likely send VWO and the shares of other emerging market funds soaring back to their recent highs.
That wraps up the weekly ETF fund flows for this week…
Keep in mind, there’s a lot of information of ETF fund flows. And it can be a very useful tool if you know what you’re looking for.
Good Investing,
Corey Williams
Category: ETFs, Investment Style ETFs, Market Analysis, What's Going On?
