Close Menu
BlogSpotTipsBlogSpotTips
  • Home
  • Education
  • Finance
  • Latest Internet News
    • Social Media
    • Software
  • Game
  • Contact Us !
Facebook X (Twitter) Instagram
BlogSpotTipsBlogSpotTips
  • Home
  • Education
  • Finance
  • Latest Internet News
    • Social Media
    • Software
  • Game
  • Contact Us !
Facebook X (Twitter) Instagram
BlogSpotTipsBlogSpotTips
Home»Finance»The most fearful market trade of all in abysmal January
Finance

The most fearful market trade of all in abysmal January

DeepBy DeepFebruary 27, 2016No Comments4 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Share
Facebook Twitter LinkedIn Pinterest Email

Treasury bond exchange-traded funds took four of the top five spots among all ETFs in investor inflows in January. It’s the first time that’s happened since 2003, and only the second time ever that Treasury bond ETFs have dominated ETF flows in a month.

The ETF data, provided to CNBC by XTF.com, shows just how fearful investors were in a January that was the worst for the markets since 2009. Only twice in the history of the ETF industry have four Treasury ETFs managed to make the top 10 ETFs in asset flows — August 2003 and September 2015 — let alone the top 5 for a 30-day period.

Traders in the Standard & Poor's 500 stock index options pit at the Chicago Board Options Exchange (CBOE).

Getty Images
Traders in the Standard & Poor’s 500 stock index options pit at the Chicago Board Options Exchange (CBOE).

Nicholas Colas, chief market strategist at Convergex, said there are some similarities between now and August 2003, the last time this occurred, that are worth noting. The Fed was getting to the end of a rate cycle that had bottomed at a 1 percent rate. Ten-year Treasurieswere in “hard rally mode” going from over 5 percent yields in August 2003 to 3.6 percent in September 2003. And stocks were in decline from April 2003 to a low in September 2003.

“Basically, a similar picture to now. Bonds working and stocks falling,” Colas said, though he added that a big difference is “a dovish Fed back in 2003 and a theoretically hawkish one now.”

Liz Ann Sonders

Panicky sellers will be sorry: Schwab strategist

Colas added: “If that is a bit of an indictment regarding the Federal Reserve’s desire to raise short rates and (presumably) see the rest of the yield curve follow, so be it.”

In his month-end ETF review, released last Friday, the Convergex chief market strategist noted that the Fed Funds Futures now only see a 58 percent chance of one rate increase this year from the Fed; last month that number was 83 percent.

Colas said the January ETF data shows an almost “dollar-for-dollar swap” out of U.S. stocks (–$10.3 billion) and into U.S. fixed income (+$11.7 billion). “‘In the doghouse’ seems to fit the general state of affairs in global risk asset markets,” Colas said.

To show just how sour investors were on stocks in January, flows into ETFs targeting energy stocks of $931 million were the highest of any U.S. stock sector, according XTF.com data.

Bill McNabb, chairman, president and CEO of Vanguard Group

Vanguard CEO: Expect less from stocks for adecade

The big shift into bonds makes sense among the short-term market volatility but is arguably even more notable for occurring at the outset of a rising rate environment. “Don’t people know that interest rates are going up? Oh, wait. …” Colas quipped.

Some other highlights from the Convergex and XTF.com analysis of ETF flows in January:

  1. Small-cap ETFs recorded outflows of $1.4 billion in a month that saw small-cap stocks trail the S&P 500 by 4 percent. Colas said that it’s all the more surprising since small-caps are supposed to have more insulation from dollar-strength than large-caps.
  2. ETFs tracking technology stocks, which had proved most resilient last year, recorded $2.3 billion in outflows in January. “A +$2 billion exodus seems to support the notion that investors are more cautious on the group than at the end of last year,” Colas said.
  3. Treasury ETFs are leading the way in inflows, but gold is outperforming Treasury bonds year-to-date by a small margin. And the ETF money flows for commodity funds were positive to the tune of $1.3 billion YTD for precious metals funds with over $1 billion into gold funds alone in January.
  4. Real estate ETFs had inflows of $807 million in January. “Yield-hungry investors are also looking to real estate ETFs to replace the payouts from energy-sector limited partnerships,” Colas said.
  5. Financial ETF outflows totaled $2.5 billion, the worst of any sector. Only the materials sector has worse performance than financials in January.

[“source -cncb”]

abysmal all fearful In January market? most of the Trade
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
Deep

Related Posts

Using AI-powered Enterprise Interfaces to Optimize Operational Efficiency

May 20, 2025

Strategies for Greater Financial Flexibility: 5 Smart Ways to Repay Your Home Loan Faster

May 6, 2025

The Exchange: John Rogers on overcoming pessimism with patience

March 5, 2025
Recent Post
  • Social Media and Relationships
  • Online Counselling for Individuals and Couples
  • The Best Time to Post on Threads in 2025 — Data from 700K+ Posts
  • Using AI-powered Enterprise Interfaces to Optimize Operational Efficiency
  • How to Grow Your Brand with Micro Influencer Marketing
  • What Are the 8 Different Types of Video Game Articles?
  • Strategies for Greater Financial Flexibility: 5 Smart Ways to Repay Your Home Loan Faster
  • PS5 Pro vs the PS5 – What’s the difference, really?
Search
  • Home
  • Privacy Policy
  • Contact Us !
© 2025 BlogSpotTips. Designed by BlogSpotTips.

Type above and press Enter to search. Press Esc to cancel.