The largest exchange-traded fund in the world saw the most investor exits in a single month since its inception. The S&P 500 ETF Trust had almost $7 billion worth of redemptions on Monday alone, Bloomberg found. Invesco’s QQQ has had the biggest monthly exit since the dot-com bubble burst, the report said. Sign up here for our daily newsletter, 10 Things Before the Opening Bell. The biggest exchange-traded fund in the world had the worst monthly outflows in its history in January amid a broader market rout, according to data compiled by Bloomberg News.
The data showed redemptions in the S&P 500 ETF Trust, which trades under the ticker “SPY” and has more than $400 billion in assets, were the highest since 1993, when the fund launched. The ETF lost almost $7 billion on Monday alone, Bloomberg reported.
The well-known ETF tracks the S&P 500 Index. So far this year, it has lost 6.1%, closely mirroring the slump in the broader index.
SPY hasn’t been the sole fund to experience massive outflows. The Invesco QQQ Trust Series 1 had the most redemptions — $6.2 billion to be exact — since the dot-com bubble burst in the early 2000s, Bloomberg found. The tech-focused fund has lost about 10% year-to-date as the index it tracks, the Nasdaq, has slumped about 12%.
January was the worst month for stocks since the onset of the COVID-19 pandemic in March 2020 when markets tumbled. Last month, the S&P 500 sank more than 5%, with speculative and tech stocks getting hammered. The sell-off was largely attributed to the Federal Reserve as it signaled aggressive plans to raise interest rates to fight inflation, which is at its highest in decades. To start February, stocks have edged higher.
In its story, Bloomberg noted that the exits from big funds didn’t represent the equity ETF market as a whole, considering it saw approximately $23 billion in net inflows last month. The Financial Select Sector SPDR ETF and the Vanguard Value ETF led the pack, Bloomberg said.
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