(Bloomberg). — The looming bear market is causing traders to sell sector-specific assets at an unprecedented pace. 

Bloomberg Intelligence data shows that roughly $11.9 billion was taken from sector-exchange-traded funds in May. This puts the category on pace for the largest monthly drawdown ever recorded. That’s the first time those ETFs have posted net outflows since September 2020.

It is evident that the magnitude of these withdrawals speaks to the extent of stock market selling as the Federal Reserve raises its monetary policy against sky-high inflation. Except for consumer staples where $154 million is still available, money has left every sector except that. This happens as people shift spending away from necessities to meet rising prices. While past episodes of broad-based sector episodes have proceeded the Fed swooping in to soothe markets, no such relief is expected now, according to Bloomberg Intelligence’s Eric Balchunas.

“Given how much traders rotate between the sectors themselves, whenever you see almost all of them with outflows, it is a bad sign because it shows nothing is working, there’s no door out,” senior ETF analyst Balchunas said.

After a Tuesday plunge of 2.5%, it recovered to par with losses. Nearly every sector has dropped so far in 2022, except for energy, which rallied as Russia’s invasion of Ukraine fueled a spike in commodities. 

Investors have drawn money from sector funds in a wide variety of ways, but the results are not uniform. BI data shows a record 85 percent spread between sectors performing well and those that have performed poorly over the 12-month trailing period. 

Sector ETF outflows follow a record $119 Billion haul in 2021. To State Street (NYSE: Global Advisors), a prominent issuer of sector-specific mutual funds, said that outflows were a result of traders shifting exposure when bearish sentiment prevails. 

“It’s not good. It’s general risk-reduction,” Matt Bartolini, head of SPDR Americas Research at State Street, said on Bloomberg Television’s “ETF IQ” program Monday. “The market will eventually start to find some form of a bottom and overall, sectors are a really strong-form of alpha-generation and if we take a longer-term view, their use-case in portfolios continues to remain intact.”

There is much debate about where exactly the bottom of stocks might lie. Even as the S&P 500 briefly dipped into bear market territory on Friday, remarkably average trading volume and a relatively contained Cboe Volatility Index suggested that the selloff isn’t yet showing signs of capitulation. 

BI’s Gina Martin Adams also sees few signs of an approaching floor. 

“Pair-wise correlations in the S&P 500 are still below average, and a long way under the above-normal levels that usually characterize market distress, a worrisome sign that a long-term bottom is elusive,” she wrote Monday.

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