ETF Trading Report: Grains, Small Cap ETFs in Focus

U.S. stocks had a choppy session to open up the week as a lack of news kept investors focused on China growth concerns and worries over Washington D.C. policies. As a result, the Dow and the Nasdaq both fell by about 0.4% while the S&P 500 slumped by 0.2% on the day.

No one sector really stood out during Monday’s session, although investors did see strength in the basic materials segment and a number of pharma and utility names. Meanwhile, some consumer companies along with a number of industrial goods makers, saw weakness, while JPM led the financials lower, losing about 2.7% on the day (see Beware These Three Volatile Financial ETFs).

Investors did see small inflows into the Treasury bill market as the 10 year saw yields slump by about two basis points on the session. Commodities, on the other hand, continued to rebound as strength was seen in oil (but not natural gas), while grains were solid performers once more, led by 4.0%+ moves in both the corn and the wheat markets.

For ETF volume, trading levels were depressed once again across the board. Major equity products traded about half their normal volume, while investors saw similar levels in many major emerging market and commodity products as well.

However, a few funds bucked this trend, including several in the agricultural space such as the iPath DJ-UBS Grains TR Sub Index ETN (JJG - ETF report). The product usually does volume of about 70,000 shares in a normal session but saw a spike to just over 270,000 shares today (see Beat the Heat with These Three ETFs).

The reason for this increase in volume was undoubtedly the continued surge in grain prices, led by corn and wheat once again. Thanks to these two crops, JJG added another 4.2% today, pushing the fund higher by over 37% in just the past month alone.

Another segment which saw outsized volume on the day was in the small cap growth ETF market. A number of products in this space saw a great deal of interest including the iShares S&P Small Cap 600 Growth Fund (IJT - ETF report) which saw volume more than three times the daily average (read Guide to Small Cap Emerging Market ETFs).

Interestingly, most of the volume came due to a few block trades right after 10:00am when the product was at its low for the day. These two trades accounted for more than half of the total volume in the fund, although the ETF did still finish the day lower by 0.4%, the same as the broad market despite the increase in activity.

(see more in the Zacks ETF Center)