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Here's How Traders Positioned For Yellen's Jackson Hole Speech

August 26, 2016 10:35 am
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Here's How Traders Positioned For Yellen's Jackson Hole Speech

The latest data from Lipper shows that investors were dumping U.S. stock funds in the week leading up to Federal Reserve chair Janet Yellen’s speech at the Economic Symposium in Jackson Hole, WY. According to Lipper, U.S. stock funds endured $6.4 billion in outflows during the week.

Investors seem to have positioned their portfolios conservatively ahead of Yellen’s speech.

Yellen said the possible path to a rate hike is wide and the case for one has strengthened in recent months.

Funds devoted to U.S. stocks witnessed $4.5 billion in outflows on the week, while funds dedicated to international stocks witnessed $1.8 billion in outflows.

Despite the S&P 500 making new all-time highs throughout the summer, U.S. stock funds have logged negative flows in 28 of the past 34 weeks.

Related Link: A Rate Hike Before The Election?

European stock funds have been hit particularly hard lately. Outflows picked up steam last week, rising to $1.2 billion, their highest level since early July. Last week marked the 12th consecutive week of outflows.

If investors are dumping U.S. stocks, where is all that money going? Emerging market funds notched their 8th consecutive week of inflows last week, bringing in $620 million in new cash. In addition, bond funds recorded their 10th consecutive week of inflows at +$222 million.

Investors looking to adopt the market’s cautious approach ahead of Yellen’s speech should consider selling the SPDR S&P 500 ETF Trust (NYSE: SPY) and the Vanguard FTSE Europe ETF (NYSE: VGK) and buying the iShares MSCI Emerging Markets Indx (ETF) (NYSE: EEM) and the iShares Barclays 20+ Tr Treas.Bond (ETF) (NASDAQ: TLT).

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