Investors are ditching QQQ, the largest tech ETF at the fassstest pace in 20 yrs.
The $122-B Invesco QQQ Trust Series 1 (NYSEArca:QQQ) ETF suffered its biggest daily outflow since October 2000, losing almost $3.5-B Friday.
The tech-heavy fund, which tracks the NAS 100, is suffering outflows after the sector’s amazing rally over the past few months. The index just faced a 3rd weekly loss and is on track for its worst month since Y 2008, a turnaround spurred by lofty valuations, persistent unemployment and a congressional stalemate on further virus aid/relief/stimulus.
There is evidence that some risk-tolerant traders are seeking to position themselves for a quick reversal, piling into a 3X-leveraged version of QQQ that has become popular among day traders. The $7.9-B ProShares UltraPro QQQ (TQQQ) marked a 3rd straight wk of inflows.
While techs decline, sectors that had suffered the most during the height of the US virus chaos lockdown are outperforming.
State Street’s Industrial Select Sector SPDR Fund (XLI) saw its best weekly inflow since June last week, while the firm’s Technology Select Sector SPDR Fund (XLK) had its worst since January.
Industrials, materials and the transportation companies started to outpace the broader market months ago, and those cyclical factors continue have the most momentum, even in this pullback.
Have a healthy day, Keep the Faith!