A wildly popular trade that involves buying proven stock-market winners just saw its biggest outflow on record


A hugely popular trading strategy that revolves around betting on proven stock-market winners saw its largest monthly-outflow on record in October.

Investors pulled a record $US1.6 billion from momentum-focused exchange-traded funds last month, according to Bloomberg data going back to 2012.

Most of the outflows over the period came from traders pulling more than $US1 billion from the iShares Edge MSCI USA Momentum Factor ETF, which holds about $US9 billion worth of assets. Those investors have continued to flee this month, with $US155 million pulled from the momentum ETF on Nov. 5 alone.

Here are the top weightings in the ETF, ranked by current market value:

  1. Microsoft:$US494 million
  2. Procter & Gamble: $US485 million
  3. Visa:$US472 million
  4. Mastercard:$US468 million
  5. Disney:$US368 million

The rotation away from the momentum trade comes as investors shift funds away from growth sectors and into value stocks. Both growth and momentum strategies have dominated the more than 10-year bull market as historically easy monetary conditions have reset investor valuation thresholds.

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