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Big Money Is Flowing Out Of Small Caps And Into Large Caps

Analyst Paul Weisbruch of Street One Financial brings us his daily fund flows update, which includes a continued flight away from small cap funds and into large caps, along with some seemingly unrelated outflows from mid caps.

We have seen late year portfolio tilting among managers that has consisted of inflows into SPY (>$3 billion in) and larger outflows in Small-Caps via IWM (Russell 2000, >$-2.7 billion out) in the past couple sessions although we note that trading volume has been extremely low for more than a week now (dragging the 3-month trailing average volume in SPY below 100 million shares to about 90 million shares).

Elsewhere, in spite of lower average trading volumes out there in the marketplace, we have also seen some outflows in Mid-Caps, with more than $1.3 billion leaving VO (Vanguard Mid-Cap) and >$1 billion flowing out of IJJ (iShares Mid-Cap 400 Value), and these very well could be tax-related or endof-quarter/year end trading within managed ETF model portfolios. ETF/Index options volume has been extremely negligible thus far this week as well, with little to point to in that arena as we approach year-end.

The iShares Russell 2000 Index (ETF) (NYSE:IWM) was trading at $135.48 per share on Wednesday afternoon, down $1.17 (-0.86%). Year-to-date, IWM has gained 21.32%, versus a 11.46% rise in the benchmark S&P 500 index during the same period.

IWM currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #15 of 29 ETFs in the Small Cap Blend ETFs category.

Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch

paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.

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