ETF Trading Report: Clean Energy, China ETFs In Focus


Tuesday trading started off on a down note as Fed Chairman Ben Bernanke’s initial testimony suggested that the central bank was ready to undertake more QE to boost the economy. However, investors quickly shrugged this off and focused in on solid corporate earnings, especially from Goldman Sachs and beverage giant Coca-Cola.

Thanks to these reports, American stocks finished the day solidly in the green as the Nasdaq added about 0.5% while the Dow moved higher by 0.6% and the S&P 500 led the three major indexes, gaining 0.7%. These gains were led by strength in the consumer market, health care, and banks, while basic materials also helped push many indexes higher on the day despite some weakness from the semiconductor market.

Meanwhile, the U.S. dollar traded slightly lower while the 10 year added a few basis points in yield, moving up to the 1.51% level for the benchmark bond. Commodities were more mixed as oil products broadly rose, while most of the soft commodities as well as the metals finished the day in the red (see the Guide to the 25 Cheapest ETFs).

For ETF volume, the day was once again light, although not nearly as bad as investors have seen in weeks past. In fact, a number of ETFs in the commodity world as well as the international ETF space, saw outsized trading volumes in Tuesday’s session.

In particular, ETF investors saw an outsized amount of interest in the China market, as evidenced by solid volumes in a number of products targeting the space. One such fund that was especially in focus was the Guggenheim China Real Estate ETF (TAO) which saw volume close to 2.8 times the normal amount (read If China Slumps, Avoid These Three ETFs).

Interestingly, the product managed to see heavy volume and rise almost 3.1% on a day that saw many other China stocks and ETFs plunge. In fact, PGJ and a host of China sector funds all lost more than 2% on the day, led by a 4% plunge in the aforementioned PowerShares China ETF (PGJ).

Another fund which saw an outsized level of interest was the Market Vectors Global Alternative Energy ETF (GEX). This product usually does about 16,000 shares in volume saw nearly 59,000 shares move hands in Tuesday’s session (read Clean Energy ETFs: Thrive with These Two Broad Funds).

However, investors should note that a great deal of this volume—slightly more than half—came thanks to a large block trade around 10:51am. Without this trade, the volume would have likely still been above average, but certainly not noteworthy. Nevertheless, the product lost about 0.9% on the day, while other ETFs in the green sector also saw higher-than-normal trading volumes and slumping values as well.

(see more in the Zacks ETF Center)

Read the analyst report on TAO

Read the analyst report on GEX

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