Analyzing Fund Flows of Financial ETFs in November
ETF investors have poured $469 million into the SPDR S&P Regional Banking ETF (KRE) during the year so far. During the month of November 2015, KRE gained $268 million in terms of assets. During the week ended November 27, investors added $29 million to KRE.
Much of the optimism in the US financial sector comes from the high probability that investors are weighing in on a rate hike in December. Banks are direct beneficiaries of higher interest rates, as rises lead to margin expansions.
Changes in institutional investors’ holdings
In 3Q15, trade activity by 13F filers displayed a 13.2% rise in aggregate shares held by institutional investors and hedge funds. Among the 214 13F filers holding the stock, 62 funds reduced their exposure to KRE, while 49 funds sold all their holdings of the ETF. In contrast, 30 funds created new positions, and 86 funds increased their exposure to KRE.
Institutional asset management companies such as Citigroup (C), Morgan Stanley (MS), Elliott Associates, Wellington Management, and UBS were the top five buyers of KRE.
Meanwhile, institutions that significantly reduced their holdings during the quarter were Goldman Sachs (GS), Horizon Investments, Credit Suisse (CS), JPMorgan Chase (JPM), and EJF Capital. Among these, Horizon Investments and EJF Capital sold all their shares of KRE during the third quarter.
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