The Riskalyze Report: Advisors dump bank stocks and gold

At the request of so many investment advisors, my friends at Riskalyze share the big trends in the assets going into and coming out of advisor portfolios every week. The underlying data is aggregated from hundreds of thousands of client accounts across the $120 billion and counting that advisors manage on the Riskalyze platform*. I hope we can uncover interesting trends for you each week…

Riskalyze

September 6th -September 12th

Winners (advisor flows TO these investments increased substantially):
  1. First Trust Dorsey Wright Focus 5 (FV)
  2. iShares S&P U.S. Preferred Stock Index (PFF)
  3. Amazon (AMZN)

Losers (advisor flows FROM these investments increased substantially):

  1. Gold (GLD)
  2. Financials (XLF)
  3. Vanguard FTSE Developed Market (VEA)

 

Josh here – last week the Fed punted on raising rates due to market volatility. The market responded with a 300 point sell-off right in the Fed’s face. Riskalyze CIO Mike McDaniel notes that the decline in advisor holdings of both gold and financial stocks was noteworthy. “Advisor usage of GLD was down 11% week-over-week, despite GLD being up (approximately 3%) on the week. Use of financials dropped over 5% week-over-week despite XLF being up as well.

Interesting to see PFF catch a bid. Preferreds have been a great alternative to corporate junk bonds in recent years as the asset class is almost predominantly made up of bank and financial securities. This means, you get the higher yield of junk bonds but almost none of the energy / industrial sector exposure. With rates on hold longer, it makes perfect sense to see advisors reach for preferreds again.

*(to state the obvious, Riskalyze does not share client sensitive data with me or use animals in testing).

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