Tech ETFs Bleed Billions as QQQ and SQQQ Outflows Defy Gains

Date: February 5, 2026

Market Overview

Today’s net fund outflows highlight a mixed landscape of investor activity, with notable withdrawals concentrated across equity, sector, and thematic ETFs. While tech-focused products dominate the list, financials and emerging markets bonds also feature prominently. The data does not immediately suggest a broad asset-class rotation, but the presence of leveraged and inverse products like SQQQ adds nuance to the interpretation. Performance trends vary widely, from sharp declines in crypto-linked assets to modest gains in international quality factor strategies.

ETF Highlights

QQQ - Invesco QQQ Trust As a flagship Nasdaq-100 tracker, QQQ’s $1.88 billion outflow reflects reduced appetite for large-cap growth equities. The ETF’s -2.81% intraday drop and $398.57 billion AUM underscore its role as a bellwether for tech sentiment. Its 2026 performance remains negative, down 5.7% year-to-date, which may help explain the outflows amid profit-taking or sector rotation.

IQLT - iShares MSCI Intl Quality Factor ETF This international equity ETF, focused on high-quality stocks, saw $553.2 million in outflows despite a 3.67% intraday gain. Its $12.42 billion AUM and -1.2% YTD performance suggest investors may be selectively reducing exposure to foreign markets, even as the fund’s quality factor tilt temporarily outperformed broader equity declines.

IBIT - iShares Bitcoin Trust ETF The crypto-linked IBIT recorded $528.3 million in outflows, aligning with its -27.3% YTD slump. The 27.3% drop in its net asset value likely triggered selling pressure, though the $56.58 billion AUM indicates lingering institutional interest. The outflow could signal caution ahead of potential regulatory developments or profit-taking in a volatile sector.

AIQ - Global X Artificial Intelligence & Technology ETF AIQ’s $500.1 million outflow highlights waning enthusiasm for AI-focused equities. The fund’s -4.7% intraday drop and -7.8% YTD performance may reflect investor skepticism about near-term earnings potential in the theme. Its $7.62 billion AUM suggests it remains a niche but significant corner of the tech sector.

XLK - State Street Technology Select Sector SPDR ETF As a broad technology sector ETF, XLK’s $450.3 million outflow mirrors QQQ’s struggles. The -5.79% intraday decline and -8.2% YTD performance could indicate a broader reassessment of tech valuations. With $87.29 billion AUM, its outflow may signal a shift toward more defensive sectors.

XLF - State Street Financial Select Sector SPDR ETF XLF’s $446.2 million outflow contrasts with its -2.7% intraday drop and -3.4% YTD performance. As a financials sector proxy, the outflow might reflect reduced demand for interest-rate-sensitive assets, though the sector’s performance remains broadly in line with market trends.

DIA - SPDR Dow Jones Industrial Average ETF Trust DIA’s $391.1 million outflow is puzzling given its 1.74% intraday gain and -1.5% YTD performance. The industrial average’s relative resilience may have prompted some profit-taking, but the $43.8 billion AUM suggests the outflow is modest in the context of its broader positioning.

EMB - iShares J.P. Morgan USD Emerging Markets Bond ETF EMB’s $355.6 million outflow occurred despite a 0.17% intraday gain and -2.1% YTD performance. As an emerging markets debt play, the outflow could reflect caution about currency volatility or geopolitical risks, though the fund’s modest gain complicates the narrative.

SQQQ - ProShares UltraPro Short QQQ SQQQ’s $308.3 million outflow contrasts sharply with its 8.88% intraday gain, the largest among today’s top outflows. The leveraged inverse ETF’s performance suggests short-term bets against the Nasdaq-100 have been profitable, yet the outflow may indicate investors locking in gains or reassessing directional exposure.

HYG - iShares iBoxx $ High Yield Corporate Bond ETF HYG’s $241.8 million outflow aligns with its -0.12% intraday drop and -4.3% YTD performance. As a high-yield bond proxy, the outflow could reflect risk-off sentiment or concerns about corporate defaults, though the sector’s modest decline does not yet signal a systemic shift.

Notable Trends / Surprises

The dominance of tech and financials in the outflow list suggests a sector-specific reassessment, particularly in growth-oriented assets. The inclusion of both long (QQQ, XLK) and short (SQQQ) tech ETFs adds complexity, potentially indicating profit-taking on both sides of the trade. Meanwhile, the presence of EMB and HYG highlights continued caution in credit markets, though their mixed performance complicates the interpretation.

Conclusion

Today’s outflows may indicate a cautious approach to growth equities and leveraged bets, with investors potentially rebalancing toward more defensive or cash-like positions. The sharp decline in IBIT and the mixed performance of SQQQ suggest crypto and inverse leveraged products remain volatile focal points. While the data does not confirm a broad market shift, the concentration in tech and financials could reflect a temporary recalibration of risk exposure.