U.S. Markets open in 54 mins.

ETF Trading Report: Swiss, Real Estate ETFs In Focus

Eric Dutram

Despite more worries from Spain and Europe in general, U.S. equity markets managed to rise broadly in Tuesday trading. The day’s gains largely came from strength in the banking sector as well as a consensus beating report in the ISM Non-Manufacturing Index. This figure came in at 53.7 topping the 53.5 prior reading as well as the consensus helping to end the streak of poor data.

Thanks to this, the Dow eked out a 0.2% gain while the broader indexes added 0.6% for the S&P 500 and 0.7% for the Nasdaq. In addition to banking strength, many of the tech, healthcare, and basic materials names added on the session while some weakness was seen in the staples and telecom segments to close out Tuesday trading (read Global X Debuts Top Guru Holdings Index ETF).

Currency markets were more flat on the other hand, as the Dollar Index managed to gain slightly thanks to more weakness in European currencies although the yen did help the index as well. Beyond dollar inflows, investors did see some selling of Treasury bills as government rates rose, led by a nearly nine basis point move higher in the 30 year note, while mid and short term rates stayed pretty much flat on the day.

Commodity markets did follow equities during Tuesday trading as broad gains were seen in many products across the natural resource world. While oil and gold were flat, there was some strength in silver and many of the softs including cocoa and orange juice. However, results were dragged down by a slump in both wheat and cotton during Tuesday trading.

In the ETF world, volume was somewhat light across the board, led by lower-than-average trading volumes in a number of commodity products as well as a variety of popular international ETFs.

However, investors did still see outsized trading volumes in a number of ETFs across the spectrum. In particular, a few European ETFs, U.S. sector funds and fixed income products saw outsized activity in today’s rocky market.  

One ETF that saw an especially robust day of volume was the iShares FTSE EPRA/NAREIT Developed Real Estate ex-US ETF (IFGL). The product usually sees a paltry 60,000 shares move hands but experienced a massive spike to over 735,000 shares during Tuesday trading (see Real Estate ETFs: Unexpected Safe Haven).

This was especially unusual considering the low volume levels that many other products tracking the real estate market saw in Tuesday’s trading, as only a handful saw volume exceed their averages. Instead, IFGL seemed to pique investors’ interest during the day and especially during the final 10 minutes of the session.

This suggests that either some heavy activity was due to take place right after the bell—unlikely as the fund was unchanged after-hours—or some investors are anticipating a very rocky session for international real estate markets during Wednesday’s trading.

Another fund that tipped the scales in terms of volume was the iShares MSCI Switzerland Index Fund (EWL). This product usually sees about 234,000 shares change hands in a normal day while today saw a spike to about 945,000 shares (read For Europe ETFs, It Is Hard To Beat Switzerland).

Volume was pretty well spread out throughout the day although there was a 50,000 share block that did move hands early in the session. Beyond that, trading was pretty well spread out throughout the day.

Interestingly, EWL saw the most outsized volume of any major ETF in the European space during Tuesday trading suggesting that investors were looking to the country as the way to play the region without the direct euro exposure.

(see more on ETFs at the Zacks ETF Center)

Read the analyst report on IFGL

Read the analyst report on EWL

Zacks Investment Research

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

More From Zacks.com