ETF Trading Report: Chile, Small Cap Value ETFs In Focus - ETF News And Commentary

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American stock markets finished the day mostly flat, although it was a volatile end to the session as participants worried over the comments from former Greek politicians. This caused a brief market swoon although equities managed to bounce back to breakeven in the final minutes of trading on Tuesday.

In the session, the Dow finished slightly in the red, the S&P 500 barely in the positive, while the Nasdaq fell by about 0.3% on the day. Big gains were finally seen in the banking sector, while some large tech names such as Google fell, dragging the Nasdaq lower for the day (see Three European ETFs That Have Held Their Ground).

Currency trading was in the dollar's favor during Tuesday's session as the dollar index rose above the $81.60 mark on the day. Gains were pretty much across the board with the greenback adding close to 1.3 cents against the euro, although the American currency did lose a little over a cent against the Aussie dollar. Still, the risk-off trade didn't really materialize as the ten year note saw yields rise to the 1.78% mark, a four basis point gain.

Meanwhile in commodities, the strong dollar pushed many natural resources lower on the day as gold, silver, and oil all finished in the red. One of the only winners on the day was natural gas yet again, although this was overshadowed by multi-percentage point losses in the soft commodity market, led by a 5% slump in corn and a 3.9% loss for cotton.

In ETF trading, it was another above-average day across many products, led by strength in a variety of equity ETFs. Commodities continued to see lower-than-average trading levels, although this was balanced out by heavy volume in commodity producer ETFs and national ETFs that have a focus on natural resources.

With this backdrop, the often overlooked iShares MSCI Chile Index Fund (ECH) saw a huge day of volume. The product usually sees just under 170,000 shares change hands but experienced a spike to nearly 715,000 shares in Tuesday's session (see Three Financial ETFs That Avoid Big Bank Stocks).

The volume was also decidedly negative as the product lost about 1.5% in the session, although there was a decent amount of activity in the final hour of the session. Probably, investors sold off ECH as an equity proxy for the industrial metals market as weakness permeated this segment during the day.

Chile is a top producer of copper and a huge exporter of the red metal, so the weakness of the product, combined with the uncertainty in Europe, was likely a huge catalyst for the negative performance during Tuesday's trading session.

Another ETF that saw an outsized day of volume was the iShares S&P Small Cap 600 Value ETF (IJS). The product usually sees volume of around 274,000 shares but experienced a spike to just over 7.7 million shares during today's trading (read iShares Files For Latin America Bond ETF).

The reason behind the large move was unclear as the product lost about 0.8% on the day and most other small cap value ETFs saw trading volume that was roughly in-line with historical averages. Seemingly, a huge block trader decided to make a large bet on the space during the final hour of trading.

In this time period, investors saw well more than half of the volume take place including two blocks of more than half a million shares, and another truly massive block of nearly 2.3 million shares. These moves came right before the low of the session, although in after hours trading the product has fallen back to the levels that these block trades were made at in the final hour of Tuesday's trading.



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