OK, we have a real “who done it” on our hands. Somebody took around $7 billion out of Vanguard’s S&P 500 ETF…….symbol VOO…….in just one day last week. That amounted to roughly 4% of the fund’s assets and looks like it was done in one large record setting trade. That’s a really big deal.
So why does nobody know (as of yet) who exited this holding? Because of the lower than average trading volume (always slow in December) the trade was most likely executed in the OTC market (or directly with the fund) thus allowing for a lot more anonymity. Like, “did you hear about that trade?” “No.” “You know who it was?” “No.” Those are the correct answers if you ever want to see another order from “us” again. No confiding in your wife/husband/boyfriend/girlfriend either. Also, if you just took down a $7 billion stock portfolio you probably don’t want anyone to know……until you’ve worked it off anyway.
However, WHO pulled all that cash out is still a mystery……or is it? Some of the latest recent data show the third largest holder of VOO is/was Parametric Portfolio Associates with $4.9 billion invested. Coming in at number two was/is Raymond James Financial Inc with about $5.2 billion and…..ta da……..the VOO’s biggest investor was/is Bank of America Corp. with shares worth about $14 billion. Now withdrawing $7 billion would certainly lead one to believe you would have to have at least that amount invested and lightening up by taking roughly half of your investment makes the most sense. Just thinking.
But WHY pull money out? Well, the S&P is at all time highs for one. Second, if the investor was in at the first of the year he/she would be up around 14.5% BUT the VOO was up around 15.5%. An extra 1%. Great trade if all that adds up.
So, mystery solved? Kind of. Its seems the only large investor which could actually withdraw $7 billion is Bank of America and selling half your investment at all time highs at a 1% premium to the S&P is brilliant. BUT, the actual investor will likely never be known since the investor is most likely a B of A client, not the bank itself.
Love playing market detective.