ETF (exchange-traded fund) investors plowed $923 million into the Vanguard Financials ETF (VFH) in 2015. But YTD (year-to-date) in 2016 (as of February 5), VFH has already witnessed outflows of $81.7 million. During the week ending February 5, the fund recorded asset inflows of $44.3 million. Shares of VFH have been weak in 2016 to date, having lost 13.7%.
Last week, stocks in the financial sector (XLF) plunged to their lowest levels on worries of slowdowns in economic growth around the globe. The adoption of a negative interest rate policy in Japan along with a loose monetary policy and expectations of easing monetary policies in Europe have heightened fears of such a global slowdown.
Institutional investors liquidate exposure to VFH in 3Q15
The 13F filings of major institutional asset managers in 3Q15 give a negative picture for VFH. In 3Q15, trade activity by 13F filers shows a 9.4% decline in aggregate shares held by institutional investors and hedge funds. Among the 131 13F filers holding the stock, 33 funds reduced their exposure to IYF, while 17 funds sold all their holdings of IYF. However, 23 funds created new positions, and 53 funds increased their exposure to VFH.
Major institutional asset management firms like Bank of America (BAC), Morgan Stanley (MS), Bank Hapoalim, Quantitative Advantage, and UBS added VFH to their portfolios in 3Q15. Among these, two took fresh positions in VFH while three added to their existing portfolios.
Meanwhile, institutions like 1832 Asset Management, Beacon Capital Management, and M&T Bank (MTB) sold their shares of VFH.
Now let’s move on to the iShares Dow Jones US Financial Sector ETF (IYF).