Understanding Investor Sentiment in Financial ETFs: XLF, EUFN, and CHIX
Fund flows to China Financials ETF
ETF investors withdrew almost $22.7 million from the Global X China Financials ETF (CHIX) in the last three months. In comparison, the Financial Select Sector SPDR ETF (XLF) and the iShares MSCI Europe Financial Sector ETF (EUFN) witnessed outflows of $1.6 billion and $60 million, respectively, during the same period.
So far during the year, investors have withdrawn $47.4 million from the Global X China Financials ETF. Concerns in the Chinese economy have been worrying investors in emerging markets, and as a result we’re witnessing a flight of capital to developed economies.
Change in institutional investors’ holdings
Despite the negative flows to the Global X China Financials ETF, 13F filings of major institutional asset managers for the second quarter of 2015 have given a positive picture.
In 2Q15, trade activity by 13F filers displayed a 97% increase in aggregate shares held by institutional investors and hedge funds. Among the 34 13F filers holding the ETF, six funds reduced their exposures to it, while one fund sold all its holdings. In contrast, four funds created new positions, and nine funds increased their exposures to the ETF.
Major institutional asset management companies such as Janney Capital Management, Citadel Advisors, Susquehanna International Group, and Creative Planning were net buyers of the Global X China Financials ETF.
Institutions such as Jane Street Group, Old Mission Capital, KCG Holdings, and Morgan Stanley (MS) sold their holdings of the ETF during the second quarter.
Among these, Old Mission Capital liquidated all of its exposure to the ETF, while the others just reduced their holdings. Other funds to sell their holdings of the ETF were UBS, Citigroup (C), and Bank of America (BAC).
Browse this series on Market Realist: