Technology, the largest sector weight in the S&P 500, has been a favored destination for investors this year, but that trend is showing signs of abating as the FAANG stocks tumble. The five stocks comprising the beloved FAANG group are Facebook, Inc. (FB), Amazon.com, Inc. (AMZN), Apple Inc. (AAPL), Netflix, Inc. (NFLX) and Google parent Alphabet Inc. (GOOG). Apple, Amazon, Facebook and the two share classes of Alphabet, in that order, are five of the 10 largest stocks in the S&P 500.

Amazon and Netflix are consumer discretionary stocks, so they are not found on the rosters of dedicated technology exchange-traded funds (ETFs) such as the Technology Select Sector SPDR (XLK) and the iShares U.S. Technology ETF (IYW), but those funds are heavily allocated to Apple, Facebook and Alphabet. This means that those ETFs are vulnerable to price retrenchment in those stocks and outflows when those stocks fall. (See also: 4 ETFs With FANG Stocks.)

Last Friday, XLK "suffered its worst week of outflows in 18 months, shedding more than $737 million. Friday's withdrawals of $560.5 million were the most among U.S.-listed equity products, and the third highest for the ETF since the start of 2015," according to Bloomberg. XLK, the largest technology ETF by assets, allocates nearly one-third of its combined weight to Apple, Facebook and Alphabet. With last week's departures, XLK's second quarter outflows reached nearly $694 million as of June 9. Only eight ETFs have seen bigger departures since the start of the current quarter.

Not all marquee ETFs with significant FAANG exposure were punished with outflows last week. The PowerShares QQQ (QQQ) saw its price decline nearly 3 percent over the past week, but for the week that ended June 9, investors added $805 million to the ETF. Only seven ETFs saw larger inflows during that period. QQQ, which tracks the widely followed Nasdaq 100 Index, allocates over 34 percent of its weight to the FAANG stocks. QQQ is not a sector ETF, but technology and consumer discretionary, the home sectors for the FAANG stocks, combine for over 80 percent of the fund's weight. In notional terms, last Friday was the second highest volume day for QQQ since 2009. In sheer volume, it was the biggest day of turnover in QQQ since 2015, according to Rareview Macro. (See also: Big Price Tags Send Investors to QQQ.)

Perhaps surprisingly, the First Trust Dow Jones Internet Fund (FDN), the largest internet ETF, added $24.1 million in new assets last week. However, FDN's ability to continue adding assets in the face of FAANG declines is a point to ponder. While FDN features no exposure to Apple, the FANG quartet combines for over one-third of the ETF's weight. Valuation concerns are believed to be part of the reason investors are worried about FAANG stocks. FDN sports a price-to-earnings ratio (P/E) of over 26 compared with around 19 for the S&P 500. (See also: Update: First Trust Dow Jones Internet Index Fund.)