Investors appeared to rotate within U.S. equities on Wednesday, with ETF flow data showing a sharp divergence between the Nasdaq-100-focused Invesco QQQ Trust Series (NASDAQ:QQQ) and the SPDR S&P 500 ETF Trust (NYSE:SPY).
QQQ attracted $3.67 billion in net creations, the largest inflow among all ETFs, while SPY posted $3.82 billion in redemptions — the biggest outflow in the group.
Semiconductor exposure was another major draw, with VanEck Semiconductor ETF (NASDAQ:SMH), Direxion Daily Semiconductor Bull 3X ETF (NYSE:SOXL) and iShares Semiconductor ETF (NASDAQ:SOXX) combining for nearly $2.3 billion of inflows.
Other notable creations included Vanguard Total Stock Market Index Fund ETF (NYSE:VTI) ($416.1 million), Vanguard Intermediate-Term Corp Bond Idx Fund ETF (NASDAQ:VCIT) ($406.4 million), State Street SPDR S&P Biotech ETF (NYSE:XBI) ($340.5 million), Vanguard S&P 500 ETF (NYSE:VOO) ($323.7 million) and iShares 0-3 Month Treasury Bond ETF (NYSE:SGOV) ($276.7 million).
On the redemption side, investors also pulled money from iShares Core S&P 500 ETF (NYSE:IVV) ($920.5 million) and Ishares Msci South Korea ETF (NYSE:EWY) ($306.4 million).
QUICK CONTEXT: Investors Favor Growth and Semiconductors
The latest flow data points to a notable preference for growth-oriented and technology-heavy exposure over some of the market’s broadest benchmarks. QQQ’s $3.67 billion inflow nearly offset SPY’s $3.82 billion outflow, suggesting that at least part of the money leaving broad S&P 500 exposure may have been redirected toward the Nasdaq-100.
Semiconductors stood out even more clearly. SMH, SOXL and SOXX collectively pulled in about $2.3 billion, with SOXL’s leveraged structure posting a 2.76% increase in assets. SMH gained $1.39 billion, while SOXX attracted $379.8 million.
The flows also showed continued demand for fixed-income ETFs. VCIT, SGOV and iShares iBoxx $ Inv Grade Corporate Bond ETF (NYSE:LQD) each ranked among the top 10 creations, highlighting demand for intermediate corporate bonds, ultra-short Treasuries and investment-grade credit.
Meanwhile, redemptions extended beyond equities. Investors pulled $262.6 million from high-yield bond ETF iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:HYG) and $156.8 million from long-duration Treasury ETF iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT), while SPDR Gold Trust (NYSE:GLD) saw $171.1 million in outflows.
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