Semiconductor ETFs pulled in record weekly flows in the wake of a sharp drawdown, a signal that retail and institutional investors alike treated the selloff as a buying opportunity.
Bloomberg ETF analyst Eric Balchunas noted on October 22 that buying the dip in chip ETFs has a strong historical track record, and early indications suggest this latest episode is following the same script.
Record inflows during a drawdown reflect conviction, and money moving into a beaten-down sector at that scale tends to accelerate a recovery or mark a clear line for where investors see value.
The crowd is already positioned, so the next catalyst, whether from earnings, trade policy, or demand data, will move these funds sharply in either direction.