I rarely miss an opportunity to peruse ETF flow data. Typically, though, I see the information as identifying money that will be late to the performance-chasing party.
On the other hand, the March fund flow data may be telling us something unique. For one thing, in spite of a strengthening U.S. dollar in March, investors snapped up shares of Gold (NYSEARCA:GLD). Perhaps investors are sensing a shift in the dollar’s direction and/or a bit of inflation on the horizon.
Also, dollar bulls may be getting weak in the knees. One of the most popular ways to invest in the U.S. dollar is with PowerShares DB U.S. Dollar Bullish (NYSEARCA:UUP). In March, investors yanked nearly $450M out. That was roughly 22% of all UUP’s assets!
Another obvious trend has been a shift away from small-cap U.S. ETFs. The iShares Russell 2000 (NYSEARCA:IWM) witnessed a March exodus of nearly $1 billion, while Vanguard Small Cap (NYSEARCA:VB) had $440 million leave its coffers. In contrast, some of the biggest inflows have gone to Mid-Cap Blend (NYSEARCA:IJH), MidCap Growth (NYSEARCA:IJK) and the Nasdaq 100 (QQQQ).
Small-caps were outstanding in March; they’ve continued to lead the way in the early part of April. Whether the action is merely an exercise in profit-taking or indicative of sector rotation remains to be seen.
|April Performance For Key ETFs From March Inflow/Outflow (4/1/-4/9)|
|Vanguard Small Cap (VB)||3.7%|
|iShares Russell 2000 (IWM)||3.6%|
|iShares MidCap Blend (IJH)||3.3%|
|iShares Mid Cap Growth (IJK)||3.2%|
|PowerShares Nasdaq 100 (QQQQ)||1.8%|
Disclosure Statement: Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. The company and/or its clients may hold positions in the ETFs, mutual funds and/or index funds mentioned above. The company receives advertising compensation at the ETF Expert web site from Invesco PowerShares Capital Management, LLC. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities.