ETF Trading Report: EWK and IGM in Focus - ETF News And Commentary
April 05 2012 - 1:02PM
Zacks
In this new segment, we will take a closer look at two ETFs
which are seeing outsized trading volumes. Let us know what you
think!
U.S. equity markets finished the holiday-shortened week on a
choppy note as the Dow and S&P 500 ended in the red while the
Nasdaq added 12 points on the day. Commodities, however, saw strong
performances as gold and oil both gained more than 1% despite a
slightly stronger U.S. dollar.
In bond trading, the 10 year note saw yields fall by about four
basis points, leaving the benchmark note yielding just under 2.2%.
Meanwhile, the dollar did manage to firm against the euro and the
pound although the yen did add marginally against the greenback in
today’s trading.
In terms of ETF trading, several funds in the European category
saw heavy volume as traders continue to speculate over the health
of the PIIGS nations and how this will impact other nations in the
area. One product that was especially in focus was the
iShares MSCI Belgium Index Fund (EWK) which saw
trading of 360,000 shares, well above the usual 40,000.
This large increase was likely due to the broad European worries
and some investors taking short positions in the fund. In fact, the
product currently has 12% short interest, representing seven days
to cover at normal trading levels (read Three European ETFs Beyond
The Euro Zone).
Additionally, some investors are also likely focusing on the
country as another weak market that could feel the pain next.
Belgium also has a terrible budget situation although it is better
than many of the PIIGS. Thanks to this and the small size of the
country, the worst has been avoided so far although we could be in
the early stages of a reversal; the fund was down 1.4% in Thursday
trading.
Another fund that saw a huge increase in trading volume on the
day was the iShares S&P North American Technology
Sector Index Fund (IGM). The ETF usually trades around
30,000 shares in a normal session but today saw almost 400,000
shares change hands.
The reason for the spike was unclear as many of the other tech
focused ETFs had trading volumes that were in-line with their
traditional averages. Furthermore, the product focuses on large cap
stocks which are widely held across a number of other funds, both
in the tech and broad market worlds (see Three Tech ETFs
Outperforming XLK).
Lastly, the product saw mostly flat trading, as the ETF only
added about 17 cents on the day, roughly 0.2%. However, given the
huge spike in volume, this may be a fund that investors should keep
their eye on after the long-weekend as we could see more volatility
from traders who piled into this product ahead of the end of this
week’s trading sessions.
Make sure to check out the Zacks ETF Center for more information
on all of your favorite ETFs.
To read this article on Zacks.com click here.
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