The graphic below is slide 7 of a 12-slide presentation that I made in front of a group of Asbury Research clients and potential clients during my trip to New York last week. It highlights our own metric, which tracks daily US market sector-related asset flows via the 9 Sector SPDR ETFs. Asbury Research clients receive updates on these data, and their directional implications, every week.
The chart on the left side of the slide shows that the percentage of all sector ETF-related sector bets allocated to Energy expanded from 9.6% on February 18th to 11.3% on March 4th, which indicated that an already under-loved sector was starting to attract some new money.
Our trend model, which utilizes the inputs from this metric, shifted to overweight in Energy on March 3rd. Since then, the sector has outperformed the S&P 500 SPDR ETF (SPY) by 3%.
The chart on the right side of the slide shows that the percentage of all sector ETF-related sector bets allocated to Health Care contracted from 12.9% on March 19th to 11.8% on March 31st, which indicated that investor assets were leaving an already over-loved sector — presumably for other areas of the market.
Since March 19th and through the close on April 9th, the sector has underperformed the S&P 500 SPDR ETF (SPY) by 3%.
Although these ETF asset flows need to be monitored closely to stay on top of existing and emerging trends in investors flows, our metric tends to coincide with or slightly lead near to intermediate term trends in relative sector outperformance or underperformance.
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