ETFs Winning & Losing Fund Flows Into Year-End (GLD, XLV, FXI, SPY, XLK, EFA)

Banking, finance, and taxes

Published: December 28, 2011 2:46 pm

Last Updated: April 27, 2020 8:52 pm

TrimTabs is showing what many investors might have expected. After such a volatile year in the stock market, investors are seeking safety in the nearly no-income offered by bond funds and bank savings accounts. The areas suffering: gold, healthcare, and China. What is interesting is that there are some unexpected winners of inflows in equity ETFs as well.

Over $50 billion has flowed into bank savings accounts in the last month, with another $30 billion going into bond funds. Rather than income, “Safety” is currently the most important criteria for investors at this time per the TrimTabs report.

What you guessed on gold is true: Over the past month $2.2 billion left the SPDR Gold Shares (NYSE: GLD) ETF. TrimTabs also pointed out that another $800 million has flowed out of the healthcare ETF called the Health Care Select Sector SPDR (NYSE: XLV). When you consider that the Gold ETF is worth over $70 billion it might not matter so much, but the healthcare ETF has a current value of only about $4.4 billion per Yahoo! Finance data. The iShares FTSE China 25 Index Fund (NYSE: FXI) was also said to lose the same as the healthcare ETF, and its market cap is listed as about $6.3 billion.

While money has continued to flow out of U.S. equity mutual funds, it is a bit interesting that the biggest inflow over the last month was in the SPDR S&P 500 (NYSE: SPY) with a $5.9 billion inflow. Its market cap is about $86 billion as of now. Charles Biderman noted that it was those inflows which “surely supported the S&P 500’s 6% pop in price.”

Another gainer was the $800 million inflows into the tech ETF via the Technology Select Sector SPDR (NYSE: XLK). The market cap today is about $7.45 billion, but it is interesting that investors went into this one just in time for so many technology leaders to issue earnings warnings even though the time measured showed a 3% rise in that one.

iShares MSCI EAFE Index (NYSE: EFA) rose 3.3% in the time tracked and it saw an inflow of about $700 million in new funds versus its market cap of $36.3 billion. This is effectively the international equity large cap index.

Biderman expects that new funds will continue to head into bond funds and savings accounts, but he noted that January is traditionally one of the biggest months for new inflows into equity mutual funds. He said, “As a result of more money chasing less new shares, the S&P 500 usually has gone up not only during January but most of the time right up until tax time in April.”

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JON C. OGG

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