Rumors have swirled this week about hedge funds bailing on Deutsche Bank amid market-moving fears that the bank is in financial trouble, but there was a multibillion-dollar move by investors away from Deutsche Bank in September that easy-to-access, reliable numbers can confirm. It's just not the exodus traders shorting shares of the German bank have been looking for.
More than $2 billion was pulled from Deutsche Bank's X-trackers MSCI EAFE Currency-Hedged Equity Fund (DBEF) in September, according to data from XTF.com as of Friday morning, the last day of the month. It was by far the biggest move out of any ETF in the past month — the second-biggest outflow from a single ETF in September was $600 million less.
After a tumultuous week, Deutsche Bank shares rallied on Friday by 14 percent.
The move has nothing to do with Deutsche Bank's financial stability, but the German banking giant may serve as a microcosm of current investor sentiment on developed markets outside the United States and questions about the stability of Europe's market, a concern Allianz's chief economic advisor, Mohamed El-Erian, pointed to in an interview with CNBC on Friday. The September outflows were part of a continued trend away from European stocks in particular.
Two iShares developed markets ETFs — iShares MSCI EAFE (EFA) and iShares Currency Hedged MSCI EAFE (HEFA) — saw a combined $1.2 billion pulled in in September by ETF traders and investors. Two of the other top-10 ETFs experiencing outflows in September were Europe funds — iShares MSCI EMU (EZU) and Vanguard Europe (VGK) — which saw $771 million and $647 million of outflows.
That means, in all, five of the top 10 ETF losers in September were developed markets, ex-US or Europe-specific bets.