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Investors Pulled $54 Million from Capital Market ETFs in 2015

Rebecca Keats

Investors Pour in to Financial ETFs before Fed’s December Meeting

(Continued from Prior Part)

Fund flows

The SPDR S&P Capital Markets ETF (KCE) has lost $53.5 million in assets in 2015 so far. In comparison, during 2014, the fund witnessed inflows of $74 million.

The increased possibility of a rate hike in December is bringing investors back to the financial sector. In the past month, the financial sector has outperformed the broad markets, gaining 1.4%. The Financial Select Sector SPDR ETF (XLF) represents the financial sector. In comparison, KCE has gained 4.4% in the past month.

Change in institutional investors’ holdings

In 3Q15, trading activity by 13F filers displayed a 5.6% decline in aggregate shares held by institutional investors and hedge funds. Among the 18 13F filers holding the stock, nine funds reduced their exposure to KCE, while three funds sold all their holdings of the ETF. In contrast, two funds created new positions, and six funds increased their exposure to KCE.

Major institutional asset management firms Credit Suisse (CS), Jane Street Group, Citadel Advisors, Spinnaker Trust, and KCG Holdings were the top buyers of KCE during the third quarter.

Institutional investors Morgan Stanley (MS), CLAL Insurance, Barometer Capital Management, Royal Bank of Canada (RY), and DT Investment Partners significantly reduced their exposure to KCE. Among these, Barometer Capital and DT Investment Partners sold all their shares of KCE during the third quarter.

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