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ETF Outflows Speed Up on Market, Earnings Fears


Mutual funds that invest in U.S. equities saw their biggest weekly outflow in nearly two months due to heavy selling in ETFs and disappointment over third-quarter corporate earnings.

U.S.-based stock funds had their worst week since early September and lost $4.74 billion, Reuters reports.

“The outflows from stock funds in the week ended Oct. 24 were almost entirely a result of investors fleeing exchange traded funds, which surrendered $4.53 billion after outflows of $2.75 billion the previous week,” according to the report.

For the week ended Oct. 25, investors have pulled $9.1 billion from SPDR S&P 500 (SPY) , according to IndexUniverse ETF flow data.

The small-cap iShares Russell 2000 (IWM) has seen outflows of $1.1 billion over the same period. [Small-Cap ETFs May Signal Big Trouble for Market]

“There’s been a general consensus that the earnings season coming out wasn’t going to be as robust as previous quarters,” said Matthew Lemieux, analyst at Lipper, in the Reuters report.

“Institutional investors probably saw on the horizon that there would be some weakness,” Lemieux added, with regard to the ETF outflows.

Full disclosure: Tom Lydon’s clients own SPY and IWM.

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