ETFs took a $19B hit last week. Where did it all go?


ETFs, or exchange-traded funds, took a massive beating last week as markets went on a roller-coaster ride with the Dow Jones Industrial Average taking not one but two massive nosedives, losing over 1,000 points twice in one week.

“Last week about $19 billion came out of ETFs. It was a big week considering over $78 billion went into ETFs in January,” Tom Lydon, president of Global Trends Investments told FOX Business.

A majority of that money, Lydon said, will most likely be turned into market money funds or into cash.

“Many people want to throw rocks at ETFs and blame them for the market volatility, but ETF’s actually got A’s across the board and held up very well when the market was being tested,” Lydon added.

Mike Venuto, chairman of the TETF Index Committee, agrees saying that after a wild week, ETF assets are only down about $30 billion year-to-date, which is less than a 1% change.

“The assets have most likely flowed to cash, as a reaction to fear,” Venuto told FOX Business, adding that bonds have not been performing well either and are likely perpetuating the volatility.

“Stocks (SPY -1%) and Gold (GLD up 1.6%) are not providing much support,” he added.

As for the future of ETFs, Lydon said there are no big concerns citing positive moves on Friday, a day after the second-biggest Dow drop in history. The Dow recorded its worst single-day loss on Monday, a 1,175-point plunge.

“I spend a lot of time talking to exchanges about ETFs, and they are trading very well and I’m not even saying that because I specialize in them. In 2017 alone, $375 billion was invested in ETFs. That’s a pretty big number.”