There are at least 10 exchange-traded funds that have gained more than 40 percent so far this year. Too bad nobody’s buying them.
Well, not exactly nobody, but the year’s leading ETFs have found a lot more sellers than buyers, with $136 million coming out of the funds even as they have soared, according to data from ConvergEx.
The leaders also have something else in common: Almost all of them track either bond or precious metals indices.
One reason the funds may scare away investors is yet another characteristic they share: Most are leveraged and thus highly volatile.
“Performance isn’t the only thing that brings in the cash in ETF land,” Nick Colas, chief market strategist at ConvergEx, said in a note. “And for all the hand-wringing about levered products drawing in unwitting retail investors, consider that these ‘best of the best’ ETFs do not seem to exert the siren’s song on unwitting investors to part with their money and steer toward the shoals.”
The ProShares Ultra Gold, which was getting crushed Tuesday, is a double-up fund and has led the way this year with a 71.9 percent return. The No. 2 fund, the Power Shares DB Long 25+ Year Treasury Bond exchange-traded note, is a triple-up fund so it pays three times the return of the long bond. It is up 71 percent so far.
The UGL has seen 73 million in inflows while the LBND has taken in $2.4 million.
Six of the other eight funds, though, are not losers in terms of flows.
The remainder of the list, with return followed by money flows:
Power Shares Gold Double Long ETN: 68.3 percent, $-68.7 million.
Direxion Daily 20+ Year Treasury Bull 3X Shares : 64.85 percent, $-5 million.
IPath SX Russell 2000 TR Index: 63.11 percent, $-1 million.
ProShares Ultra Silver: 59.1 percent, $249.5 million.
Direxion Daily Financial Bear 3X Shares : 48.48 percent, $-497.4 million.
ProShares Ultra 20+ Treasury: 44.06 percent, -$4.5 million.
Direxion Daily 7-10 Year Treasury Bull 3X Shares: 41.9 percent, -2.8 million.
ETFS Silver Trust: 41.49 percent, $118.6 million.
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