uploads/// GICS Sector Flows

Do US GICS Sector Flows Suggest Caution Right Now?


Jun. 1 2016, Updated 3:10 p.m. ET

Defensive sectors preferred amid the rally in equities

Taking a closer look at the US GICS sector ETF flows, we see that funds flowed largely into defensive sectors(XLV)(XLP)(XLU). We saw smaller inflows—or, in some cases, even outflows (XLE)(XLK)—in sectors that are considered cyclical or volatile.

Given that all major equity index ETFs rallied on the week and that all GICS sectors closed in positive territory, beneath the surface, investors seem to be taking on more risk but allocating assets into the least risky sectors. The outflows saw in the energy sector (XLE)—despite crude oil (WTI) rising for a third straight week—exemplify this cautiously optimistic approach.

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