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What Do Fund Flows to XLF Indicate?

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Fund flows

In 2016 so far, ETF investors have withdrawn $2.3 billion from the Financial Select Sector SPDR ETF (XLF). Investors withdrew $217 million from the Financial Select Sector SPDR ETF (XLF) portfolio during the week ending April 1 and $362 million in March. During the week, XLF has outperformed the broad market SPDR S&P 500 ETF (SPY) and gained 1.9%. In 2016 so far, XLF has plunged 5.9% on fears of a global slowdown, plunging commodity prices, and falling expectations of a rate hike. However, in the last month, markets have recovered, and XLF has gained 3%.

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Institutional investor holdings

13F filings of major institutional asset managers for the fourth quarter of 2015 give a mixed picture for the Financial Select Sector SPDR ETF (XLF).

In 4Q15, trade activity by 13F filers displayed a 7.4% reduction in aggregate shares held by institutional investors and hedge funds. Among the 611 13F filers holding the stock, 177 funds reduced their exposure to XLF while 56 funds sold all their XLF holdings. However, 93 funds created new positions, and 254 funds increased their exposure to XLF.

Major institutional holders like Bank of America (BAC), Franklin Resources (BEN), and Jefferies and Passport Capital have increased their exposure to XLF in the fourth quarter. Among these, Bank of America has added fresh XLF holdings to its portfolio.

Institutions that have significantly reduced their exposure are BNP Paribas, Goldman Sachs (GS), and Nomura (N). Nomura sold all of its shares of XLF.

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