ETF Trading Report: Mid Cap, Dividend ETFs in Focus - ETF News And Commentary

Markets didn’t exactly have a great start to the holiday-shortened week as stocks sank in the first hour of the session and had trouble recouping these losses in the remainder of the day. Still, the Nasdaq managed to rise back into the green, adding 0.3%, although the S&P 500 – down 0.1%-- and the Dow (down 0.4%) couldn’t fight into the positives in Tuesday trading.

In terms of sectors, basic materials, industrials, and sections of the tech world had significant trouble on the day, led lower by weakness in the independent oil and gas market as well as the chemicals industry. Meanwhile, carrying the market today was strength in the health care, consumer, and some financial firms, as well as another solid performance from Apple which added 1.5% on the day (read Invest like Mitt Romney with These Three ETFs).

Currency trading was more or less flat today, as the dollar added slightly although many are expecting more volatility later in the week after some key economic data. In the Treasury market, safe haven bonds saw yields rise slightly, although we did see some yield compression in Spanish and Italian benchmark securities, suggesting a mild risk on environment returning despite the lukewarm stock performance today.  

Commodities were also in flux during Tuesday’s trading with most energy products slumping, along with 2% losses in the cocoa, cotton, and sugar markets. Winners were harder to find in the natural resource world, although strength was apparent in the natural gas market (+1.5%), while silver added just under 3% on the day as well (read Are Preferred Stock ETFs Worth The Risk?).

Now that Labor Day is gone, more traders are returning to the market, helping to boost ETF trading volumes along the way. While volume isn’t quite back to historical levels in many products, it was close in a number of sectors while a few exploded with higher-than-average trading levels on the day.

In particular, ETF investors saw a huge day in the mid cap ETF market, but especially so in the case of the iShares S&P MidCap 400 Index Fund (IJH). This product usually does about 660,000 shares in volume on a normal day but saw well more than 10 times that move hands in Tuesday trading (read Ten Biggest U.S. Equity Market ETFs).

This burst in volume was far more than what investors saw in other mid cap products on the day and the vast majority of it was concentrated in the final part of the session when perceptions shifted back to a bull market. Thanks to this and the added investor interest, IJH added about 1.2% on the day, although it did slide back a bit in after-hours trading.

Another ETF which saw a big trading day was the WisdomTree International Large Cap Dividend ETF (DOL). The fund usually sees about 25,000 shares in volume on a normal day, but did over 400,000 shares today representing a roughly 16 fold increase (see 11 Great Dividend ETFs).

Unlike IJH, the volume activity was pretty spread out although there was a bit of outsized activity in the early part of the day. Still, the fund had a very flat session despite the increase in interest, as the product lost just 0.2% for the day.

(see more in the Zacks ETF Center)

WISDMTR-IN LCDF (DOL): ETF Research Reports

ISHARS-SP MID (IJH): ETF Research Reports

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