Major Outflows Hit The Technology Select Sector SPDR (XLK) Amid Sell-Off

technology stocks

The tech sector finally experienced a long-awaited selloff on Friday, and the Technology Select Sector SPDR Fund (NYSE:XLK) clearly felt the heat.

Investors dumped the XLK in droves amid its 2.5% single-day plunge. Bloomberg has the details on the large number of redemptions noticed in the fund:

The severity of the retreat from tech shares Friday can be seen in the amount of cash that fled the group. The Technology Select Sector SPDR Fund, ticker XLK, suffered its worst week of outflows in 18 months, shedding more than $737 million. Friday’s withdrawals of $560.5 million were the most among U.S.-listed equity products, and the third-highest for the ETF since the start of 2015.

One prominent analyst speculates that the sell-off is coming amid a sector rotation away from tech names and back into beleaguered financial and materials names. Whatever the case, tech is out of vogue for the moment — which is either a danger sign or an opportunity to get in, depending on how you look at it.

The Technology Select Sector SPDR Fund (NYSE:XLK) fell another 1.6% in Monday morning trading, which could well spur additional redemptions in the near term. Year-to-date, XLK has still gained 13.81%, versus a 8.76% rise in the benchmark S&P 500 index during the same period.

XLK currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 54 ETFs in the Technology Equities ETFs category.