(Bloomberg) -- ETF investors finally got out their white flags Thursday, but what followed was an orderly surrender in the benchmark S&P 500 fund.
This week’s global equity maelstrom spurred money managers to yank $6.6 billion from the SPDR S&P 500 ETF Trust, ticker SPY, the world’s largest passive fund with over $260 billion in assets. The 17th-biggest outflow in the product’s history constitutes a bearish capitulation of sorts: On Wednesday, the exchange-traded fund, which tracks the main U.S. index, reeled in $2.5 billion.
Volume surged as the ETF lurched from inflows to outflows. About $76 billion worth changed hands on Thursday, Bloomberg data show. That’s the highest daily turnover since February and a level exceeded only five other times in the fund’s 25-year history.
“Liquidity appears to have been solid throughout the day,” Patrick Hennessy of IPS Strategic Capital, an investment-management firm, tweeted. Bid-ask spreads in some of the most heavily-traded U.S. equity ETFs -- including SPY -- jumped but remained well below the heights reached in February.
“The Feb event was a liquidity-driven sell-off,” Hennessy wrote in a tweet. “Yesterday was, by comparison, an ‘orderly sell-off.’”
--With assistance from Dani Burger.
To contact the reporters on this story: Yakob Peterseil in London at firstname.lastname@example.org;Sid Verma in London at email@example.com
To contact the editors responsible for this story: Samuel Potter at firstname.lastname@example.org, Cecile Gutscher
©2018 Bloomberg L.P.