September ETF Fund Flows Steady During Market Volatility

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ETF TRADING RESEARCH
September ETF Fund Flows Steady During Market
Volatility
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• Hi, My name is Corey and Im with ETF Trading
  Research, today were reviewing our recently
  published article

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• September ETF Fund Flows Steady During Market
  Volatility

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• September continued the previous months
  turbulent market conditions. Global market woes
  and domestic concerns on raising interest rates
  had investors weary.

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• Despite the market turbulence September ETF Fund
  Flows held steady. Total assets invested in US
  listed ETFs ticked up 2.7 billion during the
  month.

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• Dont get me wrong, thats a fraction of the
  inflows we have seen in previous months. And
  thats a good indication of

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• The Emotion Driving September ETF Fund Flows

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• Once again we see fear as the emotion driving the
  market.
• There are a variety of indicators we use to track
  the emotional state of the market.

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• We can look at put and call options, stocks and
  bond performance, and the strength of stock price
  are just a few. All of these indicators are
  pointing to one thing investors are scared of
  where the market is heading.

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• Lets take a look at stock price strength.
• The number of stocks hitting 52-week lows exceeds
  the number hitting highs and is at the lower end
  of its range, indicating fear.

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• As you can see there are a far more stocks on the
  New York stock exchange hitting new 52-week lows
  than we had been earlier this year. This is a
  clear visual representation of fear in the
  markets.

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• ETFs With The Largest Inflows In September

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• Despite the fear in the markets ETFs like
  Vanguard SP 500 VOO and SPDR SP 500 SPY still
  logged net inflows of around 1.5 billion in
  August.
• This tells me a few things

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• Even with the fearful tone of the market,
  investors continue to have faith in large cap US
  stocks. Investors are still willing to put money
  into large US companies with market
  capitalizations greater than 10 billion.

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• These companies do business globally, have solid
  balance sheets, and often pay dividends. Although
  they are perceived to be slow growing, this tends
  to make the stocks more stable in a volatile
  market.

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• These ETFs are a good option for the investor
  that wants to see a steady return and ride out
  the turbulent market.

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• ETFs With The Largest Outflows In September

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• The outflows also gave us some relevant market
  indications. Investors are dumping their
  investments in biotech and gold miners
  industries.

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• This isnt surprising due to the negative news
  about biotech companies and gold prices. Two ETFs
  hit hardest by redemptions were the Health Care
  Select SPDR XLV and Direxion Daily Gold Miners
  Bull 3X NUGT.

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• Heres the bottom line

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• Stocks have been caught up in a negative feedback
  loop. Bad news drives down prices. Then price
  declines themselves become part of the bad news
  hurting stocks.

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• Dont forget, high levels of fear dont typically
  last long outside of bear markets. Keep an eye on
  investor sentiment for signs of improvement.

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• If the negative feedback loop is broken it could
  catapult stocks higher in the 4th quarter.

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