The stock market is in a strong bull run, with the top indices like the S&P 500, Dow Jones, and the Nasdaq 100 hovering at their all-time highs. This article explains why ETFs like S&P 500's VOO and S... ...

Top 10 Creations (All ETFs) Top 10 Redemptions (All ETFs) ETF Daily Flows By Asset Class   Net Flows ($, mm) AUM ($, mm) % of AUM Alternatives 161.78 11,585.90 1.40% Asset Allocation 33.72 27,822.49 0.12% Commodities E T Fs 266.56 245,572.68 0.11% Currency -352.54 177,550.84 -0.20% International Equity -118.86 1,988,865.70 -0.01% International Fixed Income 439.62 321,815.75 0.14% Inverse 142.29 14,264.93 1.00% Leveraged -641.2 ...

Core Viewpoint - U.S. healthcare stocks are trading at a historic discount relative to the broader market, presenting a solid investment opportunity for stability and potential growth [1][5]. Market Performance - The Health Care Select Sector SPDR (XLV) has decreased by 9.6% over the past year, while the SPDR S&P 500 ETF Trust (SPY) has increased by approximately 16%, leading to a significant valuation discount for healthcare stocks [1]. - Healthcare ETFs have experienced 12 consecutive months of net outflows totaling $11.5 billion, marking the largest outflow among all sectors [3]. Sector Challenges - The healthcare sector faces challenges due to political and regulatory uncertainties, including government policies on prescription drug pricing, tariffs on pharmaceuticals, and reduced funding for health research and Medicaid [2]. - The expiration of drug patents and setbacks for major companies have further contributed to the sector's struggles [2]. Recent Developments - The healthcare sector has shown signs of recovery, with XLV gaining 4.2% over the past week compared to a 0.5% decline for SPY, indicating potential for a turnaround [4]. - The sector is currently trading at a forward P/E ratio of around 16, significantly lower than the S&P 500's P/E ratio of about 22 and technology's P/E ratio of 30, representing the widest discount in three decades [5]. Investor Sentiment - Warren Buffett's Berkshire Hathaway invested over $1.6 billion in UnitedHealth (UNH), boosting sentiment in managed-care stocks, with UNH's stock rising more than 10% in a week [6]. - Hedge funds have increased their exposure to healthcare stocks, with notable investors like Stanley Druckenmiller adjusting their portfolios to include innovative healthcare and pharmaceuticals [7]. Corporate Actions - Stocks such as CVS Health (CVS) have gained from analyst upgrades, while Novo Nordisk (NVO) surged following FDA approval for a new use of its weight-loss drug [9]. Sector Rotation - Investors are shifting towards more stable, defensive sectors amid skepticism over high tech valuations, with healthcare stocks being viewed as a safer haven during periods of low growth and high uncertainty [11]. Innovation and Growth - The emergence of AI-driven healthcare initiatives, such as the Stargate project, is expected to revolutionize cancer research and healthcare technologies, attracting investments in AI and biotech companies [12]. - The Zacks Sector Rank indicates potential upside for the healthcare sector, with about 75% of industries ranking in the top 41%, suggesting continued momentum [13].

Group 1 - Hedge funds significantly reduced their positions in the U.S. stock market, with a net sell of $1 billion, primarily focused on macro products such as indices and ETFs [1][2][3] - The short-selling ratio for macro products reached approximately 4:1, with U.S. listed ETFs seeing a 4% increase in short positions, marking a monthly increase of 5.7% [3][5] - Technology stocks have become the main target for hedge fund short-selling, with the information technology sector experiencing net selling for the third consecutive week at the fastest pace in over four months, with a short-to-long selling ratio of 3.9:1 [5][6] Group 2 - Retail investors showed a decrease in market participation, with a net buy of $4.9 billion, below the year-to-date average of $6.6 billion per week [2][8] - Retail investors preferred ETFs, with $4.7 billion in net purchases, compared to $276 million in individual stocks, indicating a contrasting strategy to hedge funds [10] - The current earnings season has exhibited unusually high volatility, with the average stock price movement on earnings day reaching ±5.3%, the highest in 15 years, despite 60% of companies exceeding EPS expectations [11]

Core Viewpoint - The article highlights a divergence in market behavior, where hedge funds are rapidly withdrawing from the U.S. stock market despite record corporate earnings and stock prices reaching new highs, indicating a potential structural change in the market [1][4]. Group 1: Hedge Fund Activity - Hedge funds have net sold U.S. stocks at the fastest pace in four months, with a sell-to-buy ratio of 3.5:1, totaling a net sell of $1 billion, primarily in macro products like indices and ETFs [2][5]. - The short positions in U.S. listed ETFs increased by 4%, with a monthly growth of 5.7%, reflecting a cautious outlook on the stock market [5]. - The technology sector has become a primary target for hedge fund shorting, with a sell-to-buy ratio of 3.9:1, marking the fastest net selling in over four months across all technology sub-sectors [7]. Group 2: Retail Investor Behavior - Retail investor participation has decreased, with net purchases of $4.9 billion last week, below the year-to-date average of $6.6 billion and the past 12-month average of $5.6 billion [3][14]. - Retail investors continue to favor ETFs, with $4.7 billion in net purchases compared to $276 million in individual stocks, indicating a preference for broader market exposure [15]. - Specific ETFs like QQQ, SPY, and VOO saw significant net inflows, with QQQ leading at $724 million [16]. Group 3: Earnings Season Volatility - The current earnings season has exhibited unusually high volatility, with the average stock price movement for S&P 500 constituents reaching ±5.3%, the highest in 15 years [18][19]. - Approximately 60% of companies exceeded earnings per share (EPS) expectations by more than one standard deviation, yet this strong performance has not translated into sustained stock price increases, highlighting market sensitivity to valuations [19]. - Sector performance has been mixed, with technology stocks experiencing gains while consumer sectors showed weak price reactions regardless of earnings performance [20][21]. Group 4: Market Outlook - Upcoming macroeconomic data releases, including CPI, PPI, and retail sales, are expected to be focal points for market participants [22]. - The earnings season is nearing its end, with only 1% of S&P market cap companies yet to report, and implied volatility suggests a modest expected movement of ±1.25% for the S&P 500 this week [23].

Group 1: Hedge Fund Activity - Hedge funds accelerated their net selling of U.S. stocks at the fastest pace in four months, with a sell-to-buy ratio of 3.5:1, contrasting with long-term investment funds that net bought $4 billion during the same period [1][2] - The net selling by hedge funds reached $1 billion, with over 90% concentrated in macro products (indices and ETFs), and short positions in U.S. listed ETFs increased by 4% [1][2] - Technology stocks became the primary target for hedge fund shorting, with a sell-to-buy ratio of 3.9:1, marking the fastest selling pace in over four months [4] Group 2: Retail Investor Activity - Retail investors' participation declined, with net purchases of $4.9 billion, below the year-to-date average of $6.6 billion per week and the past 12-month average of $5.6 billion [7] - Retail investors favored ETFs with $4.7 billion in net purchases compared to individual stocks at $276 million, with large-cap ETFs receiving $2.2 billion in net inflows [9] - Nvidia, Amazon, and Palantir were the most favored individual stocks among retail investors, with net purchases of $453 million, $453 million, and $253 million respectively [10] Group 3: Earnings Season Volatility - The current earnings season has shown unusually high volatility, with average stock price fluctuations on earnings days reaching ±5.3%, the highest in 15 years [11] - 60% of companies exceeded EPS expectations by more than one standard deviation, while only 9% fell short, indicating a strong earnings performance that has not translated into sustained stock price increases [11] - The market is expected to focus on macroeconomic data releases, including CPI, PPI, and retail sales data, as the earnings season nears its end [11]

Core Insights - Hedge funds are rapidly withdrawing from the U.S. stock market, with a notable net sell-off of $1 billion, contrasting with long-term investment funds that net bought $4 billion during the same period [1][2] - Retail investor participation has decreased, with net purchases of $4.9 billion, below the year-to-date average of $6.6 billion [1][7] - The divergence in strategies between institutional and retail investors indicates a significant difference in market outlook [1] Hedge Fund Activity - Hedge funds have shown a structural shift in their short-selling behavior, with a short-to-long selling ratio of approximately 4:1 in macro products, particularly U.S. listed ETFs, which saw a 4% increase in short positions [2][4] - The technology sector has been the primary target for hedge fund short-selling, with a net sell-off for three consecutive weeks and a short-to-long selling ratio of 3.9:1 [4] - Other sectors such as financials, industrials, and energy also experienced significant net sell-offs, while real estate saw the largest net buying in 3.5 months, driven entirely by long positions [4] Retail Investor Trends - Retail investors continue to favor ETFs over individual stocks, with net purchases of $4.7 billion in ETFs compared to $276 million in individual stocks [9] - The largest net inflows among ETFs were seen in QQQ, SPY, and VOO, while individual stocks like Nvidia, Amazon, and Palantir attracted significant retail interest [9] Earnings Season Volatility - The current earnings season has exhibited unusually high volatility, with the average stock price movement on earnings day reaching ±5.3%, the highest in 15 years [10] - Despite 60% of companies exceeding EPS expectations, this has not translated into sustained stock price increases, indicating market sensitivity to valuations [10] - Sector performance has varied, with technology stocks experiencing upward movement while consumer stocks showed weak price reactions regardless of earnings performance [10]

And Todd, you mentioned that you're seeing a lot of flows into equal equal weighted S&P funds. Um, is that kind of driven, you think, by this concentration risk that everyone is is talking about. And that's a way to kind of garner more exposure to a diversified basket of of stocks.Yeah, it's it's hard to see Nvidia at 8% of the S&P 500, Microsoft not far behind at 7%. And not get concerned about how concentrated you are with an ETF like SPY or Vanguard 500, VO. So people are looking to get the benefits of d ...

ETF vs Mutual Funds - ETFs trade all day, offering liquidity, while mutual funds trade only once daily after the close [2][3] - ETFs often have lower management fees due to passive index tracking, but actively managed ETFs can have higher fees [5] - Mutual funds may have minimum buy-ins around $1,000, while ETFs require only the price of one share [6] - Mutual funds can offer automatic savings plans, while ETFs provide flexibility with options trading and short selling [6][8] ETF Market Growth and Evolution - The number of mutual funds has plateaued since the beginning of the century, currently at over 6,500, down from a pre-pandemic peak [9] - ETF growth has accelerated, nearing 4,000, with assets under management at approximately $11 trillion, half of mutual funds' $22 trillion [10] - SPY (S&P 500 ETF) was launched in 1993, enabling trading of the entire S&P 500 like a stock [14][15] - QQQ (NASDAQ 100 ETF) launched in 1999, allowing trading of the NASDAQ 100 [18] - The ETF rule streamlined the launch process, leading to an explosion in ETF volume and new launches [23] - Invesco seeks to convert its QQQ fund from a fixed unit investment trust to an open-end ETF, potentially increasing its management fee income by over $600 million annually [26][29] SPY vs QQQ Performance - Since 1993, SPY's total price return is over 1,300%, while QQQ's is over 1,007% since 1999 [27] - SPY experienced a worst sell-off of -56% during the global financial crisis, while QQQ had -83% during the dot-com bust [27][28] - SPY's management fee is 00945%, approximately half that of QQQ [28] - SPY's daily trading volume is 67 million shares, equivalent to $42 billion, compared to QQQ's 40 million shares, or $23 billion [28][29]

To borrow a phrase from my favorite tennis commentator, Robbie Koenig, the Fundstrat Granny Shots US Large Cap ETF (NYSEARCA: GRNY ) is like a mongoose on amphetamines, becoming one of the fastest- growing active ETFs The Sunday Investor has completed all the educational requirements for the Chartered Investment Manager designation and is on track to become a licensed options and derivatives trading advisor. Focusing on U.S. Equity ETFs, The Sunday Investor maintains a comprehensive ETF Database that tracks ...