How Much Have Investors Pulled from KCE in 2016?

Hit or Hint: What Are Financial ETF Fund Flows Trying to Tell Us?

(Continued from Prior Part)

Fund flows

YTD (year-to-date), the SPDR S&P Capital Markets ETF (KCE) has lost $50.8 million in assets. By comparison, the fund’s outflows in 2015 topped out at $58 million. KCE invests in a portfolio of asset management companies in the United States (SPY). But flows into the capital market space have suffered due to steep corrections in financial markets (XLF) across the globe. Investors have fled riskier assets like equities and fixed-income products and instead chosen to stay put in safe haven assets amid this uncertain environment.

Changes in institutional investors holdings

In 3Q15, trade activity by 13F filers shows a 5.6% decline in aggregate shares held by institutional investors and hedge funds. Among the 18 13F filers holding KCE 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 like Credit Suisse (CS), Jane Street Group, Citadel Advisors, Spinnaker Trust, and KCG Holdings were the top buyers of KCE during 3Q15. Institutions like 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 3Q15.

For more in-depth analysis, check out Market Realist’s Financials page.

Browse this series on Market Realist:

• Part 1 - XLF Traded in Bear Country All Last Week

• Part 2 - Understanding XLF’s Outflows So Far in 2016

• Part 3 - VFH Has Been Trading below Moving Averages since December 31, and It Matters