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Money Is Flowing Out Of SPY And Into Competing VOO Instead

Analyst Paul Weisbruch of Street One Financial in his daily fund flows update points out continued outflows from the world’s largest ETF, but perhaps corresponding inflows into one of its main competitor funds.

We have already spoken recently about building outflows in the largest ETF, S&P 500 tracking SPY (-$3.5 billion out) in recent sessions, as the SPX continues to fail at 2271 and 2276 technical resistance. Interestingly, we are now actually seeing some buyers in competing ETF VOO (Vanguard S&P 500, +$1 billion in).

It’s rare to see two products that track the exact same index to not be correlated in terms of money flows. Perhaps investors are catching onto the fact that VOO has a significantly lower expense ratio of 0.05%, versus SPY’s 0.09%.

In other activity, we have seen some very short-dated options activity in SPY involving the January 230 calls, which expire this Friday. With SPY’s current $226 handle, these options are approximately 1.5% out-of-the-money with only a couple days left before expiration.

Elsewhere, most of the ETF/Index options activity that we have seen this week has involved portfolio managers closing out of protective put positions and in some cases rolling into hedges in months that are further out on the calendar.

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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