SPDR S&P Retail ETF (XRT) Loses 80% of its Assets Friday

SPDR S&P Retail ETF (XRT) Takes a Dive Amidst GameStop Drama

According to Bloomberg on Friday, SPDR S&P Retail ETF (XRT), an equal-weighted retail exchange traded fund, has lost more than $700 million of it $800 million in assets this week as the GameStop saga continues.

Investors reportedly pulled nearly 80% of XRT’s assets this week, draining the fund to just $164 million after GameStop’s surge swelled its weighting in XRT to 20%. According to Bloomberg, the weighting of Gamestop should have been closer to 1% since the fund tracks an equal-weighted index.

Analysts are citing many possible reasons for the outflows, since the fund was up nearly 20% this week. One theory is that because XRT shares are exchanged for the underlying stocks in the fund, investors are ditching the ETF to get their hands on GameStop shares, according to Bloomberg analysts.

Another possibility is that some holders may just be ready to take a profit since XRT has gained about 40% in January, on track for its best month ever. According to the article, the cost to borrow GameStop shares climbed as high to 200% last week, and was roughly 50% on Friday.

The GameStop’s drama has captured the world’s attention as a group of amateur investors using Reddit and other social-media platforms challenged hedge fund managers betting that these shares will fall in value. GameStop’s market value stands at nearly $22 billion midday Friday from around $1.3 billion at the start of 2021. 

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