After the last two weeks of carnage in bonds and stocks, we noted that JPMorgan had warned there remains a critical "residual risk" that this "healthy correction" turns into something much, much more vicious...

[The position unwinding], combined with the low equity exposures of Discretionary Macro and Equity Long/Short hedge funds, leaves retail investors as the residual risk for equity markets going forward.

Retail investors had poured more than $100bn into equity ETFs during January. Of that $100bn, $40bn was invested into US equity ETFs. US equity ETFs, which have been at the epicenter of the fund outflows over the past week, lost $25bn so far. So more than half of the $40bn that had entered US equity ETFs in January has been withdrawn already. So again, the picture we are getting in the US equity ETF space is one of advanced rather than early stage de-risking.

Well, in another confirmation of the "worst case scenario", the world's largest and most liquid ETF - SPY, which tracks the S&P 500 - saw its biggest absolute dollar weekly outflow ever.

As Bloomberg notes, investors actively abandoned the world’s biggest passive fund during the onset of market mayhem.

Outflows amounted to 8 percent of the fund’s total assets at the start of the week, a rate of withdrawals not seen since August 2010.

And the entire ETF space saw massive outflows compared to the rest of the world...

As TrimTabs reports, while U.S. equity ETFs were dumped at a record pace, global equity ETFs did not experience any selling.

As we already noted above, U.S. equity ETFs had outflows on each of the first six trading days of February totaling $29.7 billion (1.5% of assets).  This six-day outflow is the biggest on record, surpassing the previous record of $24.4 billion (2.7% of assets) in February 2014.

Meanwhile, global equity ETFs were not sold amid the carnage, issuing $1.3 billion (0.2% of assets) in February.  These funds suffered no selling even though they plunged 8.2%, nearly as much as the 9.0% decline of their U.S.-focused counterparts.

Furthermore, ETF traders are taking the losses of bond funds this year in stride.  Bond ETFs have issued $1.6 billion (0.3% of assets) in February even though they are down 1.7% year-to-date.