Daily ETF Roundup: IWM Rises, VXX Sinks

by on March 22, 2010 | ETFs Mentioned:

Equity markets trended modestly upwards Monday as health care stocks led the way after sweeping reforms passed in a tense vote in the House of Representatives on Sunday night. The divisive bill seeks to expand coverage to millions of Americans, and will likely have far-reaching effects on the economy for years to come (see which ETFs may be impacted here). Among the biggest gainers were HMOs, who stand to benefit from the increased customer pool. “The last few weeks we’ve noted for example that the HMOs — the Wellpoints and Aetnas of the world — have been doing quite well,” said Robert Schaeffer, portfolio manager with Becker Capital Management in an article for Reuters. “I think that’s probably an anticipation that, while there are some negatives, there’s still a universe of 33 or 34 million people that at some point of time are going to go under some form of insurance platform.”

ETFdb 60 IndexThe ETFdb 60 Index added 3.24 points, or 0.3%, to close the day at 1,049.53. In relatively light trading, winners outnumbered losers by nearly three-to-one.

Among the losers were energy and utilities, which were the only two sectors to post declines on the day. Oil trended higher to finish the day above $81/bbl. This helped to push gasoline prices  to a 17-month high; the nationwide average is now $2.82 per gallon.

Few ETFs in the ETFdb 60 trended down today, but iPath S&P 500 VIX Short-Term Futures ETN (VXX) led the losers, finishing lower by 1.9%. This came after a relatively flat market in Monday trading and a final end to the health care debate which removed a major source of volatility in the market over the past year. The fund has been on a brutal losing streak, shedding more than one-third of its value since the start of the year.


Among the big winners on Monday were small cap equities; the iShares Russell 2000 Fund (IWM) finished the day higher by 1.4%. This uptick could be due to a variety of factors, but likely causes are the increased risk tolerance for investors and the larger than average allocation to health care stocks in the majority of small cap funds. In addition, utilities and energy firms, which were the few losers on the day, make up a small portion of small cap funds due to their capital intensive nature.


Disclosure: No positions at time of writing.