Tech and Leveraged ETFs Drain Billions Amid Gains

Date: January 28, 2026

Market Overview

Today’s ETF outflows reflect a mixed shift in investor positioning, with notable withdrawals across both equity and fixed-income products. While tech-focused and leveraged equity ETFs dominate the top outflow list, Treasury and corporate bond ETFs also experienced meaningful redemptions. The data suggests a potential reassessment of growth-oriented and leveraged strategies, though the absence of clear macroeconomic triggers in the dataset limits broader interpretation. The largest outflows occurred in large-cap tech and S&P 500 vehicles, alongside leveraged semiconductor and Russell 2000 funds, indicating a possible pullback from high-beta and niche growth exposures.

ETF Highlights

QQQ - Invesco QQQ Trust As a flagship Nasdaq-100 tracker, QQQ’s $1.68 billion outflow marks it as the day’s largest redemptions. Despite a 3.08% intraday gain and a 8.23% YTD performance, the fund’s $408.54 billion AUM may amplify sensitivity to shifting risk appetite. The outflow could suggest profit-taking or a tactical reduction in large-cap tech exposure amid consolidation.

SPY - State Street SPDR S&P 500 ETF Trust The S&P 500 benchmark SPY saw $1.03 billion in outflows, despite a 1.98% gain and a 1.98% YTD rise. Its $710.82 billion AUM often reflects broad market sentiment, and the outflow may indicate a rotation toward sector-specific or defensive alternatives rather than a bearish shift in the equity asset class.

FV - First Trust Dorsey Wright Focus 5 ETF This small-cap growth ETF, tracking five momentum-driven sectors, faced $886.65 million in outflows. Its 7.74% intraday gain and 7.74% YTD performance highlight strong recent momentum, but the redemption volume might signal caution around overextended momentum plays in niche markets.

IWM - iShares Russell 2000 ETF The Russell 2000-focused IWM lost $539.63 million, despite a 6.96% gain and a 6.96% YTD rise. With $76.47 billion AUM, the outflow could reflect selective trimming of small-cap positions amid concerns about valuation extremes or sector-specific volatility.

TLT - iShares 20+ Year Treasury Bond ETF TLT, tracking long-duration Treasuries, saw $350.69 million in outflows despite a 0.50% gain. Its 0.50% YTD performance and $45.67 billion AUM suggest investors may be reducing long-end bond exposure, potentially reflecting expectations of stabilizing yields or a shift toward shorter-duration strategies.

SOXL - Direxion Daily Semiconductor Bull 3X Shares This 3X leveraged semiconductor ETF faced $321.86 million in outflows, despite a 66.76% intraday surge and a 66.76% YTD gain. The massive outflow may indicate risk-off behavior in volatile leveraged products, even as the underlying sector rallied sharply.

VGIT - Vanguard Intermediate-Term Treasury ETF VGIT, an intermediate Treasury fund, lost $306.37 million despite a 0.19% decline and a -0.20% YTD performance. The outflow could signal a tactical rebalancing away from fixed income, though its modest negative returns may also deter new inflows.

VCIT - Vanguard Intermediate-Term Corporate Bond ETF VCIT, focused on corporate bonds, saw $243.22 million in outflows despite a 0.19% gain and a 0.19% YTD rise. The redemption volume might reflect a shift toward Treasuries or cash, though the fund’s positive performance complicates interpretations of broader credit market concerns.

TQQQ - ProShares UltraPro QQQ This 3X Nasdaq-100 leveraged ETF lost $234.52 million despite an 8.23% gain and a 8.23% YTD performance. The outflow may indicate risk mitigation in leveraged products amid heightened volatility or profit-taking after a strong rally.

XLK - State Street Technology Select Sector SPDR ETF XLK, a broad tech sector ETF, faced $224.60 million in outflows despite a 3.65% gain and a 3.65% YTD rise. The outflow could signal a rotation within tech, with investors favoring more focused semiconductor or AI-related plays over broader exposure.

Notable Trends / Surprises

The top outflows highlight a pronounced focus on tech and leveraged equity strategies, with five of the 10 ETFs tied to technology or Nasdaq-linked exposures. Simultaneously, Treasury ETFs (TLT, VGIT) and a leveraged semiconductor fund (SOXL) also featured prominently, suggesting a dual pullback from both growth equities and long-duration fixed income. The absence of large-cap value or defensive sector ETFs in the list contrasts with recent rotation patterns, pointing to a possible consolidation phase in growth and high-beta assets.

Conclusion

Today’s outflows may indicate a tactical reassessment of overbought positions in tech and leveraged equity strategies, alongside a reduction in long-duration bond exposure. The concentration in high-growth and niche sectors, combined with redemptions in both equity and Treasury ETFs, could reflect a shift toward more defensive or selectively positioned alternatives. However, the mixed YTD performance across the outflow list complicates a single narrative, underscoring the need for further data to confirm broader positioning trends.