Every Vanguard Sector ETF Bled Cash After a Big Investor Bailed

(Bloomberg) -- It appears that one major investor called it quits on every single one of Vanguard’s popular exchange-traded funds tracking U.S. economic sectors.

A combined $1.8 billion came out of all 11 of Vanguard’s sector ETFs this week, with the outflows being triggered by individual block trades scattered between 12 p.m. and 1 p.m. in New York on Monday, suggesting it was one seller. Among the largest outflows was the Vanguard Information Technology ETF, or VGT, which lost $430 million in assets, and the Vanguard Real Estate ETF, or VNQ, which had $217 million pulled from the fund.

Vanguard is the second-largest issuer of ETFs in the U.S. Its $868 billion worth of funds make up about 26 percent of the industry’s assets, according to data compiled by Bloomberg Intelligence.

While the large-cap focused sector funds offered by State Street Corp.’s SPDR ETFs have more assets and trade more frequently, Vanguard’s are popular because they have lower expense ratios, said Todd Rosenbluth, director of ETF research at CFRA Research.

“This may have to do with year-end tax planning purposes or a shift away from sector investing,” Rosenbluth said. “The performance gap this year between sectors suggests more investors might benefit from using them tactically. But of course, getting the call wrong can be detrimental.”

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