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Emerging Markets and Real Estate: Two ETFs Trading with Outsized Volume

Zacks Equity Research

U.S. stocks ended in the red in the first trading session of the fourth quarter following reignited Brexit fears and escalated concerns regarding the financial health of Deutsche Bank. U.K. Prime Minister Theresa May indicated that Brexit might happen by the end of the first quarter of next year.

Moreover, stronger-than-expected ISM Manufacturing Index raised fears regarding a rate hike by the end of this year, which also dented investors’ sentiment. Among the top ETFs, investors saw SPY decline over 0.2%, DIA decrease nearly 0.3% while QQQ fell about 0.1% on the day.

Two more specialized ETFs are worth noting in particular though as both saw trading volume that was far outside of normal. In fact, in the most recent trading session, both these funds experienced volume levels that were more than double their average. This could make these ETFs the ones to watch out for in the days ahead to see if this trend of extra interest continues:

SCHE: Volume 3.46 times average

This emerging market ETF tracking the FTSE All-Emerging Index was in focus yesterday as roughly 1.64 million shares moved hands compared with an average of roughly 474,770 shares. SCHE gained over 0.7% on the day.

Rising rate hike prospects in the U.S. following a strong rebound in ISM Manufacturing Index last month led emerging markets to register healthy gains yesterday, which in turn boosted this ETF. However, in the last one-month period, SCHE was down about 1.2%. SCHE carries a Zacks ETF Rank #2 (Buy).

ROOF: Volume 3.35 times average

This real estate ETF was under the microscope on Monday as nearly 78,876 shares moved hands. This compares to an average trading volume of 23,540 shares and came as ROOF lost about 1.7% in the session.

Increased rate hike fears played a major role in dragging down sectors like utilities and real estate, which require significant amount of debt to finance their capital investment. In addition to strong ISM manufacturing index, Cleveland Fed President Loretta Mester’s indication to support a hike in November policy meeting also raised rate hike concerns. In the last one-month period, ROOF was down 5%.

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SPDR-DJ IND AVG (DIA): ETF Research Reports
SPDR-SP 500 TR (SPY): ETF Research Reports
NASDAQ-100 SHRS (QQQ): ETF Research Reports
SCHWAB-EMG MKT (SCHE): ETF Research Reports
IQ-US RE SC (ROOF): ETF Research Reports
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