Market Overview

A Look At The ETFs With The Most Inflows And Outflows In August, And What They'll Do Going Forward

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After a red-hot 2017, the ETF market has cooled down slightly.

As of the end of July, $153 billion had flown into ETFs in 2018 according to Oppenheimer. While that’s well above 2016’s end-of-July pace of $111 billion, it’s nearly 45 percent below 2017’s rate of $272 billion.

Fund flow, the measure of the net amount of money that’s gone in and out of a fund over a specific period of time, is an important tool to track for ETF traders and investors. While it doesn’t measure performance (that’d be price) or popularity (that’s volume), a lot of inflows or outflows of a specific fund can tell us that something is happening. And that could be enough of a signal to put a fund on your radar.

It’s hard to tell by looking at fund flow alone just which side of the trade the money is going toward. A lot of inflows could mean investors have rushed to buy a fund, or it could also mean shorts are covering their positions. Sometimes a lot of inflows can even signal a selling opportunity, as this can signal an overcrowded trade.

That said, we thought we’d take a look at some of the ETFs with the most inflows and outflows for August, according to ETF.com’s fund flow tool, and cross-reference them with VantagePoint’s predictive indicators, which forecast price over the next 1-3 days. The software’s artificial intelligence and intermarket analysis forecasts trends with up to 86 percent accuracy. Let’s see what they say about about how these funds are positioned heading into fall.

Funds With Inflows

QQQ

The Invesco QQQ Trust (NYSE: QQQ) had $3.9 billion of inflows in August, making it the fund with the second-most inflows in the month, and had risen 4.5 percent during this time. According to VantagePoint’s two main indicators, a predicted moving average and predicted neural index, the QQQ has recently crossed over into what looks like a pretty severe downtrend, and should move even lower in the coming days.


Chart as of Sept. 6 close, courtesy of VantagePoint Software

Looking at the fund’s top holdings, this forecast isn’t a surprise. Apple Inc (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), and Microsoft Corporation (NASDAQ: MSFT) combine to make up more than one-third of the fund, in fact technology makes up more than 60 percent of the fund, and all have fallen off since the end of August.

VOO

The Vanguard S&P 500 ETF (NYSE: VOO) had $1.9 billion of inflows last month, and had risen 3.5 percent in lockstep. This fund is more diversified than QQQ, which technology stocks making up only 26 percent of the fund and no stock makes up more than 4 percent. Plus, the ripping financial sector has strong representation, with stocks like JPMorgan Chase & Co. (NYSE: JPM) and Berkshire Hathaway Inc. Class B (NYSE: BRK-B) in the top 10 components.

VantagePoint is showing a recent shift to a downtrend for this fund as well. After making a new all-time high on August 29 the fund has closed down or flat four of the next five days. The new all-time highs being made in the overall market bode well for a fund like this, which VantagePoint says has been in an uptrend since July 6.


Chart as of Sept. 6 close, courtesy of VantagePoint Software

Funds With Outflows

SPY

The SPDR S&P 500 ETF Trust (NYSE: SPY) had $5.3 billion in outflows in August, making it the fund with the most share redemptions despite the fact it has a very similar allocation to VOO.

According to VantagePoint’s indicators, SPY is following the trend of the previous two ETFs mentioned. The fund is down about 1.5 percent over the last week.

Chart as of Sept. 6 close, courtesy of VantagePoint Software

GLD

The SPDR Gold Trust (NYSE: GLD) had $1.7 billion of redemptions in August, good for second-most of all ETFs in the month. This fund looks like it’s trying to turn into an uptrend, but it’s having trouble. VantagePoint’s indicators are telling us that it had a bullish crossover, but the fund has mostly traded in a range between $111-$114 the last two weeks.



Chart as of Sept. 6 close, courtesy of VantagePoint Software

The biggest thing to take away from fund flow is that it’s another tool for traders and investors to have in their toolbox. Fund flow cannot solely indicate whether a fund will move higher or lower, but it can tell us that other people think they know.

VantagePoint is a content partner of Benzinga. To get a more detailed look at their charts or a free demo, click here.

Posted-In: Long Ideas Sector ETFs Broad U.S. Equity ETFs Short Ideas Technicals Markets Trading Ideas ETFs

 

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