As temperatures grow cooler, apparently so does the market’s immediate-term conviction on some of the year’s favorite bets. Consider technology stocks. As we brace for a potential “data dump” to come our way post government shutdown as well as the latest peak into Nvidia’s financial results, headlines are broadcasting cracks in the tech sector’s impressive resilience. Energy, however, fares better.
In the past five days alone, the Technology Select Sector SPDR (XLK ) is down 4%, outpacing the S&P 500’s downside move at 2.3%.
A look at Equity ETF flows so far in November suggest some investors are aligned with the move. The largest equity ETF redemptions so far this month are tech and growth (heavy tech) related. They include the following:
- Vanguard Information Technology ETF (VGT ) has lost $1.1 billion in net redemptions in the first two weeks of November.
- Schwab U.S. Large-Cap Growth ETF (SCHG ) has lost $880 million so far in November. (About 48% of the ETF is allocated to the tech sector, and over 11% is tied to Nvidia.)
- iShares Expanded Tech-Software Sector ETF (IGV )has lost $800 million so far this month.
It could be that investors are profit-taking and rebalancing following tech’s 8-percentage-point outperformance vs. S&P 500 in the past year, or the 50-point outperformance over the past five years. Heavy tech concentration has been a hot topic throughout 2025, and a call to diversify that tech concentration has been persistently loud.
It could also be that investors are growing worried about slowing economic growth and a richly valued equity market where tech stocks are “priced to perfection” tied to the AI theme. Skepticism when it comes to the AI buildout is now a burgeoning topic of conversation in the industry.
Signs from the Headlines
Some of the headlines recently pointing to SoftBank’s sale of its Nvidia position and big-name investors like Peter Thiel and Michael Burry trimming exposure to (or shorting) AI-related companies like Nvidia and Palantir certainly add fuel to the “beware of tech” narrative.
Nvidia is expected to report Q3 earnings on Nov. 19, and as we know, a lot rides on Nvidia’s results.
While tech and tech-heavy growth ETFs are leading the November equity ETF outflow charts, there’s still plenty of buying taking place in this segment. This is hardly a mass exodus. As Simplify’s Paisley Nardini recently said of the tech selloff in a Bloomberg interview, it’s a “healthy bit of digestion.”
XLK itself has picked up about $230 million in fresh net assets in November, bringing its year-to-date asset haul to nearly $3 billion. Some other large tech ETFs continue to see assets trickling in.
Energy Emerges
From a sector perspective, it’s been interesting to note the flipside. As the tech sector gets tested, energy stocks are rising in consideration.
So far in November, the Energy Select Sector SPDR (XLE ) has picked up nearly $700 million in net new assets. That’s the biggest asset haul of any of the 11 Sector SPDRs this month. It’s also a significant sea change when we consider that the fund has been bleeding assets in 2025, with net redemptions for the year now totaling about $7.1 billion.
In the past five days, as the tech sector dropped 4% and the S&P 500 dropped 2.3%, energy stocks remained flat, showing relative outperformance.
The energy sector is offering compelling valuations relative to the market’s — and tech’s — current numbers. XLE is currently trading at a 36% discount to the S&P 500, and at a 57% discount to the tech sector, as measured by XLK.
Whether seeking compelling valuations, some hedging against persistent inflation — which energy traditionally provides — or yield, energy stocks are seeing a small boost so far this month.
ETFs for the Energy Sector
Energy remains a small sector, barely representing today 3% of the S&P 500 sector allocation. The 22-company sector has names like Exxon Mobil at the top, which snags about 23% of the mix.
Like tech, there are many ways to access the energy sector through ETFs. It’s worth noting that absent from XLE is Master Limited Partnerships (MLPs), which are a popular energy-related play. Due to their different tax treatment as partnerships and not C-Corps, MLPs can’t be part of the S&P 500. MLPs generate high yields from natural-resource-based activities.
A fund like the Alerian MLP ETF (AMLP ) tracks an index comprising energy infrastructure MLPs with a quality focus. AMLP, which offers access to real assets, has averaged a yield of 7.4% in the past 15 years. The fund has gathered $1 billion in fresh net assets so far this year, $40 million in the first two weeks of November.
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VettaFi LLC (“VettaFi”) is the index provider for AMLP, for which it receives an index licensing fee. However, AMLP is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of AMLP.
