Analyst/ETF Trader Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today looks at renewed inflows into small caps amid today’s big equities rally and a corresponding downturn in long volatility products.
Inflows continue to trickle in to small-cap IWM, with about $1 billion entering the fund lately via creation activity. While the fund is still well off its highs of late July, with the Nasdaq 100 and S&P 500 trading above their record closing highs, the motivation of these flows lately is rather clear.
We are thus watching TNA rather closely here, given the IWM inflows and the strength in global equities this morning.
Elsewhere, we note that after a surge in early to mid-August, long Volatility ETPs are once again sinking on the resumption of strength in equities (and the VIX itself below $11 once more today). VXX (which underwent yet another reverse split recently) is down more than 5% today, and threatening to give back all of its gains since its early August all-time lows. VXX has still attracted a net over $545 million in year-to-date creations, despite its never-ending losses from a long-term perspective.
The iPath S&P 500 VIX Short Term Futures TM ETN was trading at $46.17 per share on Monday morning, down $2.35 (-4.84%). Year-to-date, VXX has declined -54.75%, versus a 12.22% rise in the benchmark S&P 500 index during the same period.
VXX currently has an ETF Daily News SMART Grade of F (Strong Sell), and is ranked #7 of 12 ETFs in the Volatility ETFs category.