TrimTabs Says “Insatiable” ETF Buying Is Unlike It Has Anything Ever Seen, Issues A Warning

On Fruday, while confirming that the meme of “Fake News” has officially gone too far, Goldman Sachs slammed the talk of a Great Rotation from bonds into stocks (yes, calling it fake news), and writing that “the political rotation occurring in Washington, D. C. will not be mirrored in financial portfolios: despite the sharp fall in bond values during the past six months and the prospect of further losses in 2017, Goldman expects minimal asset rotation away from debt and into equities for two reasons. i) Many categories of investors are restricted from allocating assets away from bonds; ii) Investors such as pension funds and households that have latitude to shift assets have debt allocations that are currently at the lowest level in 30 years. Mutual funds may see a migration of assets from bonds to stocks, but the pace and magnitude of any rotation will be limited.”
For now, however, this particular piece of “fake news” appears all too real, at least as shown in a dramatic reversal in fund flows since the election.
Case in point: last week, TrimTabs Investment Research reported that U. S. equity exchange-traded funds issued a record $59.9 billion in December, easily surpassing the previous record of $50.7 billion in November.

This post was published at Zero Hedge on Jan 8, 2017.