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ETF Trading Report: China, Global ETFs In Focus

Eric Dutram

Yet again, U.S. equity markets slumped across the board as Greek troubles overshadowed positive American reports during Wednesday trading. The Dow fell by about 0.3% while the broader indexes suffered heavier losses as the Nasdaq and the S&P 500 fell by, respectively, 0.7% and 0.4% on the day.

Losses were again heavy in the financial sector, with all of the major banks suffering once more in Wednesday trading. Tech also saw weakness along with many names in the basic materials space, while consumer goods, health care and staples led the way on the upside (see Try Value Investing With These Large Cap ETFs).

In currency trading, the U.S. dollar continued to rise against the world’s major currencies, led by more gains against the pound and the euro. Nevertheless, Treasury bill trading was flat, as the 10 Year note saw yields decline by a single basis point while rates rose along the short end of the curve.

Commodity trading was much more volatile in the session as oil products fell across the board while natural gas stormed higher once again with a 5.2% gain. Agricultural commodities, on the other hand, were more mixed as losses in soft commodities balanced out with strong performances in many of the grains. Meanwhile, metals continued to face weakness, especially in the case of silver as the white metal declined by 3.3% on the day.

ETF trading was relatively heavy across the board as many products saw solid volume in the volatile session. An above average number of shares changed hands in many of the industry’s most well-known products while those in the leveraged, international, and short segments saw a great deal of interest.

In particular, investors saw a huge increase in trading for the SPDR S&P China ETF (GXC). The fund usually sees volume of about 173,000 shares but experienced a spike up to 1.8 million shares in Wednesday’s session (read Forget FXI: Try These Three China ETFs Instead).

The move came as several other China funds saw outsized trading volume days although few even came close to GXC on the session. In terms of timing, the vast majority of the activity came in the second half of the session although it helped to drag the fund lower, pushing GXC down about 2.2% for the day.

Another fund that experienced a big jump in interest was the SPDR Global Dow ETF (DGT). The product usually sees just 7,500 shares change hands in a normal session but saw a spike to 92,000 shares in Wednesday’s trading.

This spike was obviously far greater than other globally-focused ETFs and was largely due to a huge block trade in the product. In the first half hour of trading, investors saw about 86,400 shares change hands, a figure that comprises nearly all of the product’s volume for the day. In fact, the ETF didn’t trade for much of the day until some light volume in the final hour of the session.

Nevertheless, the product finished the day down about 0.4%, in-line with many other products in the space although this ETF produced less in losses thanks to its more large cap focus (read Five Great Global ETFs For Complete Equity Exposure).

(For more on ETFs check out the Zacks ETF Center)

Read the analyst report on GXC

Read the analyst report on DGT

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