World’s biggest passive fund takes record $23bn hit in market chaos
New York — Investors actively abandoned the world’s biggest passive fund during the onset of market mayhem. The SPDR S&P 500 exchange-traded fund (ETF) suffered a record $23.6bn in outflows last week amid the worst momentum swing in history for the underlying US equity benchmark. Outflows amounted to 8% of the fund’s total assets at the start of the week, a rate of withdrawals not seen since August 2010. A blowup in volatility-linked products sent markets haywire, eliciting waves of risk aversion from jittery investors. Strategists at JPMorgan said the swiftness and severity of the positioning unwind was a sign further selling from the likes of commodity trading advisers and risk parity funds "should be limited from here". "The picture we are getting in the US equity ETF space is one of advanced rather than early-state de-risking," they said. The five-session stampede for the exits erased the previous nine weeks of inflows into the fund, which is issued by State Street. The combinat...
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