RSP loses 3.1 million units, ZBRA, PYPL, GPN see ETF outflows

Four major exchange-traded funds saw big investor exits last week, with the Invesco S&P 500 Equal Weight ETF (RSP) leading the way after its units fell to $182.11 — the lowest point in 52 weeks — before bouncing back to $220.02.

The outflows come as ETFs face broader investor caution. Unlike single stocks, ETFs trade in “units” that can be created or destroyed daily to match demand. When lots of investors cash out, fund managers must sell underlying stocks to shrink the fund. That can ripple through markets, especially for smaller or less liquid holdings. RSP tracks an equal-weighted slice of the S&P 500, so its sales can pressure mid-cap stocks that don’t have deep trading pools.

The latest outflow data shows RSP lost about 3.1 million units, worth roughly $680 million at Friday’s close. That ranks as the week’s largest ETF withdrawal. Three other funds also saw notable declines: ZBRA (Braze Inc.), down 1.8 million units; PYPL (PayPal), off 1.5 million; and GPN (Global Payments), down 1.2 million. PayPal and Global Payments are both payment processors, suggesting investors are pulling back from fintech and consumer finance sectors amid rising interest rates and slowing digital-spending growth.

Fund managers say the outflows may not reverse soon. Equal-weight ETFs like RSP have lagged the S&P 500’s mega-cap rally, making them an easy target when portfolios get trimmed. Analysts warn that continued selling could widen spreads in some of the smaller names inside these funds, forcing dealers to step in with wider bid-ask spreads. For now, the message is simple: cash is leaving these four funds, and the selling could spill over into their holdings unless sentiment shifts.