With all the attention on coronavirus-related stocks lately, I thought it would be worth a look to see where investors have actually been putting their capital to work. According to etf.com, a total of $17.1 billion was yanked out of U.S. equity funds during the week — but the largest biotech exchange-traded fund (ETF), IBB, added $3.19M to its year-to-date net inflows.
But with the overall trend toward equity outflows last week, XBI — one of the larger biotech ETFs, alongside IBB — added another $79.09 million in outflows to its existing year-to-date total of $99.24 million, despite the COVID-19 catalysts that drove so many sector components higher.
XBI is 0.47% weighted to Clovis Oncology (CLVS), by the way, which you can check out on this week’s video watchlist starting at 11:54.
But what’s interesting is that LABU, which is a 3X bull leveraged version of XBI, raked in $25.21 million in net inflows last week, reversing a portion of its $83M in YTD net outflows. So traders were yanking cash out of XBI, but simultaneously pouring money into the “juiced-up” version of XBI as coronavirus plays took off.
Data courtesy of etf.com
The action in biotech fund flows really highlights the high-risk, high-reward nature of this market right now. There’s a lot of money to be made on action like this provided you play it smart.