Traders Bet On Even More Upside For Emerging Markets Funds

Analyst Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today looks at more outflows from the largest ETF on earth, a reversal of flows back into junk bond funds, and some upside options bets on emerging markets.

Outflows continue to build this week in SPY, with more than $6.1 billion leaving the fund during the recent pullback in equities.

Conversely, High Yield Corporate Bonds, as we have mentioned this week, have seen some assets return to the funds via creation flows. Over $1.3 billion has returned to HYG (iShares High Yield Corporate Bond), while more than $450 million has entered JNK (SPDR High Yield Bond) during the same time frame.

This comes after a period of sustained outflows, and is an interesting one hundred eighty degree turn. Also interestingly, both funds have also seen downside hedgers appear this week via puts, buying the June 35 puts in JNK and the April 86 puts in HYG.

In other action, near term upside April 40.50 calls in EEM (iShares MSCI Emerging Markets) have been fairly active this week as well, which are slightly out-of-the-money with several weeks until expiration.

The iShares MSCI Emerging Markets Index ETF (NYSE:EEM) was trading at $39.73 per share on Thursday morning, up $0.03 (+0.08%). Year-to-date, EEM has gained 13.48%, versus a 5.22% rise in the benchmark S&P 500 index during the same period.

EEM currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #2 of 77 ETFs in the Emerging Markets Equities 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 ETFTrends.com 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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