U.S. Equity ETF Flows Send Bullish Signals Despite Recent Inflows

| About: AdvisorShares Wilshire (TTFS)

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:

Leveraged Trades Also Set Bullish tone.

U.S. Equity ETFs took in $3.2 billion in the week by September 10th, reversing an $8.6 billion outflow the week before. Despite the latest inflows, these ETFs have shed $16.3 billion since the beginning of August, which is bullish in the short term from a contrarian perspective.

Leveraged Long Equity ETFs shed 13.7% of assets in the past week while Leveraged Short Equity ETFs added 1.8% of assets. Traders dumping leveraged long positions en masse while adding to short positions is a contrarian bullish signal, our studies find, because leveraged Stock ETF traders are usually poor market timers.

Stock and Bond Mutual Funds and ETFs Shed $3.2 Billion in September.

Stock and bond ETFs and mutual funds have given up a net $3.2 billion in September, adding to a $46.7 billion net outflow in August. Investors have redeemed a net $14.3 billion from Bond Mutual Funds this month, adding to a $35.3 billion outflow in August. Bond ETFs have taken in $3.5 billion this month, reversing a $7.6 billion outflow in August.

U.S. Stock ETFs have shed $1.0 billion this month, building on a $15.3 billion outflow in August. Stock Mutual Funds have taken in $701 million this month, reversing a $1.2 billion outflow in August.

Bond Mutual Fund Investors Sell Treasury, Muni, Corporate, and Foreign Debts Funds in Past 4 Weeks.

All the major Bond Mutual Fund categories we track lost assets in the past four weeks. Treasury Bond Mutual Funds gave up $5.1 billion (2.4% of assets), Municipal Bond funds lost $2.5 billion (3.0% of assets), Corporate Bond funds shed $793 million (0.1% of assets), and Foreign Debt funds shed $60 million (0.1% of assets) over the past four weeks.

Investors Dump Real Estate Mutual Funds in Past 4 Weeks but Favor Health Funds. Value Eclipses Growth.

U.S. Stock Mutual Fund investors redeemed a net $309 million (1.8% of assets) in Real Estate funds and $67 million (1.2% of assets) in Natural Resources funds in the past four weeks. Investors bought $94 million (1.6% of assets) in Health funds and $24 million (0.5% of assets) in Precious Metals funds in the same time frame. Value-oriented Stock Mutual Funds took in $339 million in the past four weeks while Growth funds gave up $573 million.

NYSE Short Interest Up 1.5% in Past 30 Days, But Signal Appears Neutral.

Short interest on the New York Stock Exchange rose to 13.9 billion shares as of August 31, a 1.2% increase from 13.75 billion shares on August 15 and a 1.5% rise from 13.70 billion shares on August 1. A sustained increase in short interest would be a bullish signal from a contrarian standpoint, our studies find, but the recent rise is so small that it's having only a neutral effect on the TrimTabs Demand Index.

Spec Traders More Bullish on Gold, Less Bullish on Nasdaq. Optimism on EUR/USD Dips. Bullish Bets on Oil Unchanged. Traders Less Bearish on 10-Year Treasuries, Neutral 2-Year Note.

Speculative traders grew more optimistic on gold futures last week as the long-short ratio climbed to 3.4-to 1 on September 3 from 3.3-to-1 the week before. Bullish bets on gold are up 182% since hitting an 11-year low of 1.2-to-1 on July 9.

Speculative traders' bullishness on tech stocks eased last week as the long-short ratio on Nasdaq futures dipped to 5.0-to-1 from 5.1-to-1 the week before. The Nasdaq futures long-short ratio hit its highest point since December 2010 two weeks ago and is up 64.7% from an interim low of 3.0-to-1 on July 2.

Speculative traders' bets on EUR/USD futures grew a bit less bullish as the long-short ratio dipped to 1.4-to-1 on September 3 from 1.6-to-1 the week before, the first decline in the past four weeks.

Speculative traders' bets on oil futures leveled off last week as the long-short ratio closed at 3.7-to-1, unchanged from the week before. The oil futures long-short ratio is down 10.6% from the y-t-d peak of 4.1-to-1 set on July 30.

Speculative traders last week became a bit less bearish on the long end of the Treasuries curve but turned neutral on the short end. Bets on 10-year U.S. Treasury futures produced a short-long ratio of 1.3-to-1 on September 3, down from 1.4-to-1 the week before. The long-short ratio on two-year U.S. Treasury futures, meanwhile, closed at 1.0-to-1 last week, down from 1.2-to-1 the week before.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: AdvisorShares is an SEC registered RIA, which advises to actively managed exchange traded funds (Active ETFs). This article was written by Minyi Chen, CFA the portfolio manager of the AdvisorShares TrimTabs Float Shrink ETF (NYSEARCA:TTFS). We did not receive compensation for this article, and we have no business relationship with any company whose stock is mentioned in this article. This information should not be taken as a solicitation to buy or sell any securities, including AdvisorShares Active ETFs, this information is provided for educational purposes only.

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.

About this article:

Want to share your opinion on this article? Add a comment.
Disagree with this article? .
To report a factual error in this article, click here