Top tech-tracking ETF attracts $616 million in one day

Inflows come after investors pulled $1.2 billion from the Technology Select Sector SPDR Fund in February
MAR 09, 2018

The tech bet is back. At least that seems to be the case for buyers of exchange-traded funds. Investors just poured heaps of cash into the $21 billion Technology Select Sector SPDR Fund, the largest ETF globally tracking stocks of technology companies. Known by its ticker XLK, the fund has been a go-to bet for buyers looking for cheap and broad tech exposure, charging a low expense ratio of 13 basis points. The fund saw almost $616 million in inflows on Thursday, the most since December 2011, according to data compiled by Bloomberg. "Buyers are coming out from under their shelters and scooping up XLK with other highly liquid ETFs they love to buy when they feel good," said Bloomberg Intelligence analyst Eric Balchunas. "This shows that the hot money thinks the storm is over." The bullish behavior comes after XLK investors pulled the plug on $1.2 billion worth of bets in February, the largest month of outflows for the fund since October 2014, the data show. Tech, media and telecom stocks have recovered since the broad market selloff on Feb. 5, aided by strong fourth-quarter earnings. The fund's top holdings are Apple Inc. (14.2%), Microsoft Corp. (11.4%), Alphabet Inc. (10.5%) and Facebook Inc. (6.8%). Earlier Friday, Morgan Stanley analyst Katy Huberty wrote in a note that the risks to Apple's business from U.S. tariffs and aluminum and steel and potential enforcement on intellectual property theft from China are not as bad as recent headlines indicate. Apple shares rose 1.4%, to the highest intraday since March 1, at 11:56 a.m. in New York. (More: Smart beta ETFs are hot for teachers)

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