The sharp pullback in equities spurred record outflows for two popular exchange-traded funds.

The US$16.7 billion Financial Select Sector SPDR Fund, ticker XLF, had its worst week since it began trading in 1998, with almost US$2.8 billion in outflows, according to data compiled by Bloomberg. JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. are among its biggest bank holdings. During the same period, the US$23.1 billion Health Care Select Sector SPDR Fund, or XLV, lost more than US$2 billion.

After a torrid rally sent U.S. stocks close to their pre-coronavirus levels, sentiment in markets has turned negative amid concern of a second wave of infections and further economic contraction. The S&P 500 halted a rally whose returns amounted to more than 40 per cent. Global shares fell again Monday as investors sought the safety of haven assets.

“I think XLF and XLV are just the first wave of the sector products that might see unwinding if this selloff continues,” said Mohit Bajaj, WallachBeth Capital’s director of ETFs. “There will be more unwinding in these funds.”