Financials ETF Bleeds Cash as the Yield Curve Goes Flat
- Rising interest rates also seen driving bank trading volume
- Flat yields could ‘choke off some of the net interest margin’
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Investors are unloading their financial bets amid an extreme flattening of the yield curve.
The Vanguard Financials ETF, known by its ticker VFH, had almost $160 million of outflows on Tuesday, the most since September 2016. It also saw a spike in activity Wednesday, as investors traded $156 million, or more than triple the average daily volume for the past year. A $48 million trade was the day’s largest and appeared to be a block sale.