Minyi Chen, CFA, Chief Operating Officer of TrimTabs Investment Research and Portfolio Manager of AdvisorShares TrimTabs Float Shrink ETF (NYSE Arca: TTFS) shares recent fund flow trends.
U.S. Equity ETFs Give up $4.3 Billion, Send Mildly Bullish Signal. Leveraged Trades Also Look Bullish.
- U.S. Equity ETFs gave up $4.3 billion in the week ended October 1, reversing a $3.4 billion inflow in the previous week. This week's outflows signal low demand for stocks, a bullish short-term indicator from a contrarian perspective.
- Leveraged Long Equity ETFs gave up 0.5% of assets in the past week while Leveraged Short Equity ETFs added 0.9% of assets. Our studies find it's a contrarian bullish sign when Leveraged Equity ETF investors unwind long bets and add shorts because these traders typically are poor market timers.
Stock and Bond MFs and ETFs Take in $23.2 Billion in September.
- Stock and bond ETFs and mutual funds finished September with a $23.2 billion net inflow, reversing a $42.9 billion outflow in August. Investors redeemed a net $11.7 billion from Bond Mutual Funds last month, adding to a $29.8 billion outflow in August. Bond ETFs took in $5.2 billion last month, reversing a $7.6 billion outflow in August.
- U.S. Stock ETFs took in $13.5 billion last month, reversing a $15.3 billion outflow in August. Stock Mutual Funds gave up $8.5 billion last month, more than tripling a $2.3 billion outflow in August.
Investors Buy Corporate and Foreign Bond ETFs in Past 4 Weeks but Sell Municipal and Treasury Funds.
- Corporate Bond ETFs took in $3.6 billion (6.1% of assets) in the past four weeks while Foreign Debt ETFs took in $158 million (1.0% of assets) in the same time frame. Investors sold an estimated $207 million (0.5% of assets) in Municipal Bond ETFs in the past four weeks and $130 million (0.1% of assets) in Treasury Bond ETFs.
Stock ETF Investors Buy Industrial, Sell Financial Funds in Past 4 Weeks. Growth ETFs Trump Value.
- U.S. Stock ETF investors in the past four weeks bought an estimated $1.3 billion (9.9% of assets) in Industrials ETFs and $870 million (8.2% of assets) in Consumer Cyclical ETFs. Investors sold an estimated $506 million (2.0% of assets) in Financial ETFs and $196 million (2.4% of assets) in Consumer Defensive funds in the past four weeks. Growth-oriented Stock ETFs added a net $1.4 billion in the past four weeks while Value ETFs shed $679 million.
Spec Traders' Sentiment on EUR/USD and Nasdaq Hits 52-Week High. Traders Grow More Bullish on Oil and Gold but Less Bearish on 10-Year Treasuries and 2-Year Notes.
- Speculative traders grew much more bullish on EUR/USD futures last week as the long-short ratio jumped to 2.1-to-1 as of September 24, up 38.7% from 1.5-to-1 the week before. Sentiment on EUR/USD futures has bounced strongly since July 19, when the short-long ratio closed at 1.8-to- 1.
- Speculative traders' bullishness on tech stocks hovered at a 52-week high last week as the long-short ratio on Nasdaq futures stood at 5.8-to-1, unchanged from the week before. The Nasdaq futures long-short ratio is up 91.1% from an interim low of 3.0-to-1 on July 2.
- Traders' bets on oil futures grew more bullish last week as the long-short ratio climbed to 3.9-to-1 from 3.7-to-1 the week before. The oil futures long-short ratio is down 6.0% from the y-t-d peak of 4.1-to-1 set on July 30.
- Optimism on gold futures rose last week as spec traders pushed the long-short ratio to 2.8-to-1 on September 24 from 2.5-to-1 the week before. Bullish bets on gold are up 132% since hitting an 11-year low of 1.2-to-1 on July 9.
- Spec traders became a bit less bearish on both ends of the Treasuries curve last week. Bets on 10-year U.S. Treasury futures produced a short-long ratio of 1.3-to-1 on September 24, down from 1.7-to-1 the week before. The short-long ratio on two-year U.S. Treasury futures, meanwhile, edged down to 1.1-to-1 last week from 1.3-to-1 the week before.
Hedge Fund Managers Grew Less Bearish on Stocks in September.
- Hedge fund managers grew notably less bearish on U.S. stocks in the past month, according to the latest TrimTabs/Barclay Hedge Fund Sentiment Survey. Managers were substantially less bearish on U.S. Treasuries in September compared to August but a majority of them were neutral on the U.S. Dollar Index.
Additional disclosure: This communication is a publication of TrimTabs Asset Management. It should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Information presented does not involve the rendering of personalized investment advice. Content should not be construed as an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned herein. Performance results for investment indexes and/or categories, generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing performance returns. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Past performance may not be indicative of future results. Therefore, no investor should assume that the future performance of any specific investment or investment strategy will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals, and economic conditions, may materially alter the performance of an investor’s portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for an investor’s portfolio. To the extent that this content includes references to securities, those references do not constitute an offer or solicitation to buy, sell or hold such security. AdvisorShares is a sponsor of actively managed exchange-traded funds (ETFs) and holds positions in all of its ETFs. This document should not be considered investment advice and the information contained within should not be relied upon in assessing whether or not to invest in any products mentioned. Investment in securities carries a high degree of risk, which may result in investors losing all of their invested capital. Please keep in mind that a company’s past financial performance, including the performance of its share price, does not guarantee future results. To learn more about the risks with actively managed ETFs visit our website AdvisorShares.com.