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Small Cap Funds Seeing Outflows Once Again, As Prices Roll Over

Analyst Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today sees a reversal of fortune for small cap funds, along with continued declines for long volatility products.

SPY continues to attract new assets this week even with the recent pullback from midweek highs. Over $4.5 billion has entered the fund via creations in the past several days, and in general ETF outflows have been very light this week on the whole.

In contrast, IWM (iShares Russell 2000) has seen mild outflows (-$500 million), and Small Caps have reversed suddenly to the downside after peaking midday on Wednesday. IWM pivoted lower just above $138 this morning, after trading as high as $140.86 during Wednesday’s session. We’ll keep an eye on this development to see if Small Caps once again start to lag the wider markets over a longer time frame.

In other activity, Long Volatility ETPs are struggling today, even though equities are off once again, as VXX is down about 1.6%. The VIX itself is down 3%, and trading in the mid-11 range again (today, rare backwardation is present in the VIX futures market, but we will see how long that may last — historically these anomalies work themselves out pretty quickly).

The iShares Russell 2000 Index ETF (NYSE:IWM) was trading at $138.10 per share on Friday morning, down $0.65 (-0.47%). Year-to-date, IWM has gained 2.41%, versus a 6.42% rise in the benchmark S&P 500 index during the same period.

IWM currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 28 ETFs in the Small Cap Blend ETFs category.

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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