Money entered equity funds as momentum faded in memory shares
US equity funds drew 11.72 billion dollars in a week. As memory shares retreated from their peaks, a Hong Kong fund kept double exposure to SK Hynix for three weeks.
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Large-cap funds carried the weekly inflow
Investors put a net 11.72 billion dollars into US equity funds in the week to 19 August. It was the largest weekly inflow since 29 July and the second consecutive week of buying. Large-cap funds received 9.58 billion dollars and multi-cap funds took 1.36 billion dollars. The buying did not cover the whole market: mid-cap funds lost 809 million dollars and small-cap funds lost 70 million dollars. Sector funds recorded net outflows of 3.1 billion dollars, including 1.87 billion dollars from financial funds. Bond funds received 9.92 billion dollars for their strongest week since 15 July, while money-market funds gave up 3.57 billion dollars.[1]
Memory shares returned to May levels
Sandisk, Micron Technology, Western Digital and Seagate Technology Holdings remain among the S&P 500's strongest performers this year, but their prices have returned to May levels. Sandisk and Western Digital are more than 30 per cent below their peaks, while Seagate and Micron are about 20 per cent lower. MoneyFlows chief investment strategist Alec Young said momentum investors were moving elsewhere, citing Moderna's 177 per cent rise in one day and bitcoin's rebound. Company fundamentals do not present an entirely weaker picture: Sandisk raised its long-term targets and New Street Research upgraded Micron to buy. Morgan Stanley had described Sandisk, after an 858 per cent rise from January through 30 June, as the most over-owned large technology stock relative to its index weight in the second quarter.[2]
The SK Hynix fund stayed at maximum leverage
CSOP Asset Management changed its SK Hynix Daily Max product on 3 August so that leverage could move between 1.1 and 2 times. The manager nevertheless used the maximum every day for three weeks. The product fell 26.9 per cent in its first week, from 42.52 to 31.06 Hong Kong dollars a share. SK Hynix, which the fund tracks, had risen 349.23 per cent from the start of the year to its peak on 22 June before declining. Weekly turnover also dropped 44.6 per cent from the previous week to 40.15 billion Hong Kong dollars. One retail investor who expected the flexible leverage structure to soften the decline said it instead made the move feel harsher; another investor cited in the report recorded a 77.2 per cent loss.[3]
