Investors Pour Into Inverse ETF’s At The Wrong Time!
In April, the ‘smart money’ looked pretty dumb.
With the S&P 500 up some 9.6% in the month, net inflows into exchange-traded funds topped $8.1 billion as assets swelled to nearly $535.3 billion, according to data compiled by the National Stock Exchange on Tuesday.
The overwhelming favorites in April were funds that take short positions on different indexes. Almost $8.8 billion inflow went into such so-called inverse ETFs. And most of those flows concentrated on ETFs shorting large-caps as well as a few select sectors. Chief among those were inverse ETFs focusing on financials.
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The bulk of that trading probably came from institutional pros such as hedge fund managers and large corporate investors, says Michael Traynor, the NSX’s chief strategy officer.
He noted the old adage that historically investors have shown an uncanny ability to pick the worst times to make their moves. As such, fund flows over time have become considered as contrarian investment indicators.
“April seemed to be an indication of that bad timing again,” said Traynor with a laugh.
Full Story: http://www.indexuniverse.com/sections/newsinfocus/5804-nsx.html
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