For the past couple of weeks, advisor fund searches have been dominated by hot sectors like alternate energy, electric vehicles, and volatile biopharma spaces. While these categories remain in play, we saw a noticeable change in research pattern last week. FAs were more inclined to look at broader macro themes.
TOP ETFS – BY ALL FAs (Total Traffic) Last Week
TOP ETFS BY FAs w/ AUM>$1B (Total Traffic) Last Week
TOP INDUSTRIES BY ALL FAs (Total Traffic) Last Week
|10||Diagnostics & Research|
TOP ETF CATEGORIES BY ALL FAs (Total Traffic) Last Week
|10||Small Cap Growth Equities|
|8||Health & Biotech Equities|
The reason behind this turn is the primary question for the markets. During times of volatility, we see market participants push into larger themed ETFs to avoid unstable market action, a theme referred to as the Spy Liquidity Premium. This means that investors want to be in vehicles that have improved liquidity providing flexibility for entries and exits. Volatility concern was also evident in the increased searches for short vehicles such as the ProShares Ultra Short QQQ (SQQQ), ProShares UltraShort Russell 2000 (TWM), ProShares Ultra VIX Short-term Futures (SVXY).
There is also the idea that participants are approaching the market with a 30,000 foot view for a potential rotational trade. We are two weeks away from the U.S. elections. Polls show former VP Joe Biden in the lead and the idea of FAs looking at positioning ahead of policy changes is not a surprise. It is perhaps most evident with the inclusion of the S&P Municipal Bond Index (MUB) coming in at #12 in our AUM >$1 bln list.
One item that caught our attention was the search volume for iShares Emerging Market ETF (EEM) which was #8 in the Top ETF search for all FAs and #6 for the AUM >$1bln searches. We can couple this in with the high level of searches for the Invesco US Dollar ETF (UUP). A recent Barron’s survey showed that 64% of fund managers expected a weaker dollar in the next 12 months. This would provide a boost to the EEM. The EEM does have heavy exposure to the Asia Pacific region. Those looking for greater diversity should look at the DFA Emerging Market Portfolio fund (DFEMX).
|Top ETFs Researched by Financial Advisors – Total Traffic||Ticker||Top ETFs Researched by FAs w/ AUM>$1B – Total Traffic||Ticker||Top Industries Researched by Financial Advisors – Total Traffic||Top ETF Categories Researched by Financial Advisors – Total Traffic|
|SPDR S&P 500 ETF||SPY||Invesco QQQ||QQQ||Biotechnology||Large Cap Growth Equities|
|Invesco QQQ||QQQ||SPDR S&P 500 ETF||SPY||Auto Manufacturers||Leveraged Equities|
|VanEck Vectors Gold Miners ETF||GDX||VanEck Vectors Gold Miners ETF||GDX||Software – Application||Technology Equities|
|iShares Silver Trust||SLV||iShares Russell 2000 ETF||IWM||Software – Infrastructure||Precious Metals|
|iShares Russell 2000 ETF||IWM||iShares Core S&P Mid-Cap ETF||IJH||Drug Manufacturers – Specialty & Generic||All Cap Equities|
|ARK Innovation ETF||ARKK||iShares MSCI Emerging Markets ETF||EEM||Conglomerates||Materials|
|Financial Select Sector SPDR Fund||XLF||Financial Select Sector SPDR Fund||SPY||Internet Retail||Alternative Energy Equities|
|SPDR Gold Trust||GLD||Invesco DB US Dollar Index Bullish Fund||UUP||Consumer Electronics||Health & Biotech Equities|
|iShares MSCI Emerging Markets ETF||EEM||ARK Web x.0 ETF||ARKW||Entertainment||Leveraged Volatility|
|iShares Core S&P 500 ETF||IVV||Energy Select Sector SPDR Fund||XLE||Diagnostics & Research||Small Cap Growth Equities|
|SPDR Dow Jones Industrial Average ETF||DIA||ProShares Ultra VIX Short-Term Futures||SVXY||Credit Services||Consumer Discretionary Equities|
|ProShares UltraPro Short QQQ||QID||iShares 7-10 Year Treasury Bond ETF||IEF||Internet Content & Information||Energy Equities|
|ProShares Ultra Short Russell 2000||TWM||VanEck Vectors Oil Services ETF||OIH||Specialty Retail||Leveraged Commodities|
|iShares Core S&P Mid-Cap ETF||IJH||iShares National AMT-Free Muni Bond ETF||MUB||Oil & Gas E&P||Financials Equities|
|Credit Suisse X-Links Crude Oil Shares Covered Call ETN||USOI||SPDR S&P Regional Banking ETF||KRE||Drug Manufacturers – General||Oil & Gas|
|iShares Core S&P Small-Cap ETF||IJR||Emerging Markets Internet & Ecommerce ETF||EMQQ||Solar||Volatility|
|ProShares UltraShort Bloomberg Natural Gas||KOLD||iPath Dow Jones-UBS Commodity ETN||DJP||Auto Parts||Large Cap Blend Equities|
|iPath Series B S&P 500 VIX Short-Term Futures ETN||SVXY||Vanguard High Dividend Yield ETF||VYM||Semiconductors||Government Bonds|
|Utilities Select Sector SPDR Fund||XLU||ARK Innovation ETF||ARKK||Aerospace & Defense||Asia Pacific Equities|
|ARK Web x.0 ETF||ARKW||Alerian MLP ETF||AMLP||Scientific & Technical Instruments||Industrials Equities|