Something happened this week that has never happened before. While outflows from equity ETFs soared, the $3.6 billion redemptions from high yield bond ETF HYG this last few days is the largest ever - almost twice as big as the previous largest outflows (seen in May last year).

The last week saw the biggest outflows from the high-yield bond ETF (HYG) ever...

As Bloomberg reports, the withdrawals from equity and credit funds highlighted the lack of faith in the rally that helped stocks briefly erase their annual losses last month. Equity traders have remained on the sidelines, with volume down in recent weeks as investors sought safer assets such as gold.

The S&P 500 just suffered its biggest two-week retreat since February as signs of slowing growth in the world’s largest economy mounted. Worldwide stock ETFs lost $12.6 billion in the four days through May 5, wiping out more than six weeks of inflows, as the MSCI All-Country World Index capped its worst week in three months.

“The market is becoming more cautious and using ETFs to allocate tactically. We’ll probably continue to see more flows into gold and less into equities.”

The $5.3 billion pulled from State Street’s SPDR S&P 500 ETF Trust represented more than 40 percent of the total withdrawals recorded in the first days of the month, according to data compiled by Bloomberg tracking funds of more than $100 million. Underscoring the flight from risk assets, BlackRock Inc.’s iShares iBoxx $ High Yield Corporate Bond ETF also saw outflows as traders yanked $2.3 billion from it.

Instead, they poured more than $1 billion in the SPDR Gold Shares and almost $540 million in the iShares TIPS ETF, which tracks inflation-protected Treasury notes.

The last week saw the biggest inflows to the gold ETF (GLD) since Nov 2011...

"There are a lot of things going on in the market right now, and investors are reacting to that,” said Deborah Fuhr, a former ETF research head at BlackRock who helped found London-based research firm ETFGI. “Investors are moving toward safer havens. Clearly gold is for many the safe haven, long-term store of wealth and inflation hedge.”

“There’s clearly a flight to safety, though some of it is probably profit taking,” said Christopher Johnson, the vice-president of ETF sales and strategy for the Americas at Macquarie Capital (USA) Inc. in New York.

“On the one side, some say things are much better than people think and the markets are coming back, while on the other people are very guarded and concerned. There are so many headline risks out there that it’s causing investors, particularly in the institutional space, to hesitate.”

As a reminder, it's all smoke and mirrors...

Friday’s U.S. jobs report did nothing to allay lingering worries over weak economic expansion and the efficacy of unprecedented central-bank policies.