Have U.S. retail investors gone wild? From October 12 to 16, leveraged ETFs attracted around $9.5 billion in a single week, setting a new record in Goldman Sachs’ data—nearly twice the previous record!
Look at the red box in the chart: cumulative flows into the 10 largest U.S. leveraged ETFs rebounded from around -$18 billion to around -$8 billion, while their market value shrank from about $120 billion to about $100 billion. They really are buying more as prices fall.
Most of the money poured into SOXL, a 3x leveraged semiconductor ETF. In just two weeks, it saw total inflows of around $9.3 billion.
And on the other side? Hedge funds cut their tech stock holdings at the fastest pace since Goldman Sachs began tracking in 2016. Retail investors are buying the dip while institutions are heading for the exits.
It looks like retail investors are taking shares off funds’ hands. And that was indeed the case earlier on. The chip sector just had its worst week in over a year, and SOXL has fallen nearly 50% from its October 6 high.
So retail investors who jumped in right away did get burned a bit. But after this pullback, the risk-reward looks better—same goes for Bitcoin.
Xiao Qin thinks buying the dip is fine, but don’t go all-in trying to score a big win—the risk is still high. Take it slow and stick to a position size that lets you sleep at night. That’s how you stay in it for the long haul. What do you think?
Look at the red box in the chart: cumulative flows into the 10 largest U.S. leveraged ETFs rebounded from around -$18 billion to around -$8 billion, while their market value shrank from about $120 billion to about $100 billion. They really are buying more as prices fall.
Most of the money poured into SOXL, a 3x leveraged semiconductor ETF. In just two weeks, it saw total inflows of around $9.3 billion.
And on the other side? Hedge funds cut their tech stock holdings at the fastest pace since Goldman Sachs began tracking in 2016. Retail investors are buying the dip while institutions are heading for the exits.
It looks like retail investors are taking shares off funds’ hands. And that was indeed the case earlier on. The chip sector just had its worst week in over a year, and SOXL has fallen nearly 50% from its October 6 high.
So retail investors who jumped in right away did get burned a bit. But after this pullback, the risk-reward looks better—same goes for Bitcoin.
Xiao Qin thinks buying the dip is fine, but don’t go all-in trying to score a big win—the risk is still high. Take it slow and stick to a position size that lets you sleep at night. That’s how you stay in it for the long haul. What do you think?
