Float Research: Fund Outflows Surge Amid Bond Market Anxieties

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Stock and bond funds have given up a net $32.4 billion in August thanks to strong outflows from ETFs and mutual finds alike. Read this investor insight by Minyi Chen, CFA, Chief Operating Officer of TrimTabs Investment Research and Portfolio Manager of AdvisorShares TrimTabs Float Shrink ETF (NYSE Arca: TTFS) to learn about the recent fund flow trends.

Funds Give Up $32.4 Billion in August Amid Renewed Outflows from Stock and Bond MFs and ETFs.

  • Investors have redeemed a net $23.0 billion from Bond Mutual Funds in August, building on a $19.3 billion outflow in July. Bond ETFs have shed $6.3 billion in August, reversing a $4.6 billion inflow in July.
  • Stock ETFs have given up $12.8 billion this month, reversing a $31.8 billion inflow in July. Stock Mutual Funds have given up $2.3 million in August, reversing a $7.5 billion inflow last month.

Investors Sell All Main Categories of Bond ETFs in Past 4 Weeks.

  • All the major bond ETF categories we track have given up assets in the past four weeks. Investors sold an estimated $2.3 billion (0.8% of assets) in Treasury Bond ETFs over the past four weeks. Corporate Bond ETFs have shed $1.2 billion (0.4% of assets) in the same time frame, while Foreign Debt ETFs have shed $548 million (7.9% of assets).

Stock ETF Investors Sell Financial, Consumer Cyclical Funds in Past 4 Weeks. Value ETFs Trump Growth Funds.

  • U.S. Stock ETF investors sold $1.1 billion (4.2% of assets) in Financial ETFs and $1.0 billion (10.5% of assets) in Consumer Cyclical ETFs in the past four weeks. Industrials ETFs added up $391 million (3.5% of assets) in the same time frame while Health ETFs took in $355 million (1.7% of assets). Growth-oriented Stock ETFs gave up $981 million in the past four weeks while Value ETFs took in a net $5.1 million.

Hedge Funds Shed $8.6 Billion and Lose 1.3% in June.

  • The latest TrimTabs/Barclay Hedge Fund Flow Report finds that hedge fund investors redeemed a net $8.6 billion in June, the largest outflow since October 2012. Industry assets dipped to $1.95 trillion in June. The industry lost a net 1.3% in June, its worst showing since May 2012, but did best the S&P 500's performance for the month.

Spec Traders' Bullishness on Gold Still Recovering. Bets on EUR/USD Get More Bullish. Optimism on Nasdaq Fades. Bullish Bets on Oil Slip. Traders More Bearish on 10-Year Treasuries, Unchanged on 2-Year Note.

  • Speculative traders grew more optimistic on gold futures last week as the long-short ratio climbed to 2.0-to-1 on August 13 from 1.8-to-1 the week before. Bullish bets on gold are climbing back from the 11-year low of 1.2-to-1 set on July 9.

Source: TrimTabs Investment Research

Past performance is not indicative of future results.

  • Speculative traders' bets on EUR/USD futures grew more bullish as the long-short ratio rose to 1.2-to-1 on August 13 from 1.0-to-1 the week before. Bets on EUR/USD futures have been bullish for just five weeks out of the past six months.
  • Speculative traders' bullishness on tech stocks eased last week as the long-short ratio on Nasdaq futures closed at 3.9-to-1 on August 13, down from 4.3-to-1 the week before. The Nasdaq futures long-short ratio rallied to a nine-week high two weeks ago, five weeks after hitting a 16-week low of 2.0-to-1 on July 2.
  • Speculative traders pushed the long-short ratio on oil futures down to 3.8-to-1 last week from 4.0-to-1 the week before. Over the past three weeks, the long-short ratio on oil futures has been slowly retreating from the y-t-d peak of 4.1-to-1 set on July 30.

Speculative traders last week became more bearish on the long end of the Treasuries curve but remained bullish on the short end. Bets on 10-year U.S. Treasury futures generated a short-long ratio of 1.3-to-1 on August 13, up from 1.1-to-1 the week before. The long-short ratio on two-year U.S. Treasury futures, meanwhile, closed at 1.3-to-1 last week, unchanged from the week before.

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.

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