Tags: stock | traders | 2019 | quant | etf

Stock Traders Exit 2019's Most-Popular Quant ETF in Bullish Sign

Stock Traders Exit 2019's Most-Popular Quant ETF in Bullish Sign
(Kendrysdale/Dreamstime)

Friday, 22 November 2019 01:56 PM

One of this year’s top strategies among investors seeking to ride out U.S. stock volatility may be losing its mojo.

The $36 billion iShares Edge MSCI Min Vol USA exchange-traded fund is heading toward its fourth straight week of outflows -- the longest streak since April 2018, according to data compiled by Bloomberg. Traders have pulled about $835 million from the fund since Friday.

As uncertainties over global economic growth gripped markets this year, investors looked for haven assets including low-volatility stocks, bonds and gold. But the flight-to-safety strategy started to unwind amid progress in U.S.-China trade talks and more positive economic data.

“As we saw that fear abate, investors started looking that perhaps we bottomed,” said Chris Gaffney, president of world markets at TIAA. “That pushes investors back out of these low-vol and into chasing better yields and perhaps better returns.”

While many investors seem to be dipping their toes into riskier waters, they’re not necessarily abandoning haven strategies. In fact, the S&P 500 Index is actually down since Friday, following six straight weeks of gains.

The outlook for global economic growth isn’t entirely clear, and news on the trade front has been mixed. President Donald Trump said Friday there’s “a very good chance” to make a deal with China, but added that unrest in Hong Kong is “a complicating factor.”

Despite the withdrawals from the low-volatility strategy, the trade could quickly become favorable again, said Keith Buchanan, a money manager for GLOBALT Investments. That’s what happened in August, when USMV had a record monthly inflow amid uncertainties over Federal Reserve policy and fears of a global recession.

“We can get back to the pessimistic stage we were in in August with a couple of Fed speeches and a couple data points,” he said by phone from Atlanta. “I don’t think it’s a far reach at all to be honest.”

© Copyright 2020 Bloomberg News. All rights reserved.


   
1Like our page
2Share
StreetTalk
One of this year's top strategies among investors seeking to ride out U.S. stock volatility may be losing its mojo.
stock, traders, 2019, quant, etf
311
2019-56-22
Friday, 22 November 2019 01:56 PM
Newsmax Media, Inc.
 
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved