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ETF Trading Report: Global Real Estate, TIPS ETFs In Focus

Eric Dutram

Markets soared higher in Wednesday trading as hopes for more stimulus carried stocks across the board. In particular, investors cheered comments from ECB president Mario Draghi who claimed that policy makers discussed cutting rates to a record low and that the central bank stands ‘ready to act’ according to a Bloomberg article.

This speculation led all the major benchmarks higher with both the Dow and the Nasdaq rising by close to 2.4%. Meanwhile, the S&P 500 added about 2.3%, following the European markets on the day as many benchmarks on the continent added more than 2% on the session as well (see How To Play The Spain ETF).

Unsurprisingly, stocks were awash in green during the session across all sectors with only a few names finishing in the red in the S&P 500 including HAL and COH. Instead, extreme strength was seen in the basic materials and financial sectors, while the beaten down industrial segment also added significantly on the day.

Given this optimism, it shouldn’t be too surprising to note that the U.S. dollar index slumped against many of the world’s top currencies. The euro and the pound both rose by more than one cent against the dollar although the yen did show some weakness against the greenback on the day. Meanwhile, bonds sold off again, pushing the ten year to a 1.67% yield and the 30 year to a 2.75% payout, up 11 basis points on the session.

Commodity markets were also big winners on the day thanks to the risk on trade that hit the markets. Softs were up pretty much across the board, led by a 4.4% move in sugar and a 4.6% move higher in cocoa, while silver led the precious metals adding 3.4% in Wednesday trading (see Three Commodity ETFs That Have Not Surged).

In the ETF world, volume was pretty much on par in many of the top equity ETFs in both the broad market and style box spaces. Some of the global, European, and commodity products, however, did see higher than average volumes, along with a few bond funds as well.

One such bond fund which was a popular trading tool during Wednesday’s session was the iShares Barclays TIPS Bond Fund (TIP). The product usually sees volume of just under 985,000 shares but experienced a spike to 3.85 million shares during the day’s trading (see Seven Biggest Bond ETFs).

Interestingly, more than two-thirds of this volume came in the final hour of the session when the product was trending near its lows for the day. This came along with greater interest in a number of other bond products on the day, suggesting that some investors are positioning themselves into fixed income after the recent bullish mini run in stocks as of late.

Another ETF that saw truly impressive volume on the day was iShares FTSE EPRA/NAREIT Developed Real Estate ex-US ETF (IFGL). The product usually sees volume of just 71,600 shares but saw a massive spike to 15.6 million shares during Wednesday’s trading (see Real Estate ETFs: Unexpected Safe Haven).

This incredible jump was largely the result of a 13 million share block which moved hands at 1:37pm and comes after similar—but not as robust—days of volume in the fund during recent trading. In fact, according to ETF Channel, the product has seen inflows of over $23 million in the past week alone, boosting the outstanding units in this product by over 5.8% in the short time frame.

(see more on ETFs at the Zacks ETF Center)

Read the analyst report on IFGL

Read the analyst report on TIP

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  • Read the analyst report on IFGL, TIP