Seeing Caution in FA Peers Searches

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.

TrackStarIQ Data

TOP ETFS – BY ALL FAs (Total Traffic) Last Week

RANK TICKER
10 GLD
9 DIA
8 EEM

TOP ETFS BY FAs w/ AUM>$1B (Total Traffic) Last Week

RANK TICKER
10 UVXY
9 UUP
8 ARKW

TOP INDUSTRIES BY ALL FAs (Total Traffic) Last Week

RANK INDUSTRY
10 Diagnostics & Research
9 Entertainment
8 Consumer Electronics

TOP ETF CATEGORIES BY ALL FAs (Total Traffic) Last Week

RANK CATEGORY
10 Small Cap Growth Equities
9 Leveraged Volatility
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

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