Daily ETF Roundup: PBP Sinks, DBA Jumps Higher

by on June 30, 2010 | ETFs Mentioned:

After staying rangebound for much of Wednesday equity markets tanked in the final hour of trading, pushing the Dow, Nasdaq, and S&P 500 to losses of more than 1% on the day. These losses came after payroll company ADP reported that private companies added just 13,000 jobs in June, far short of the 60,000 that was predicted by a group of economists. This led many investors to sell shares in the final part of the trading session in order to avoid a possible volatile session in Europe tomorrow as the ECB takes out roughly half a trillion dollars in one-year loans from the market. This helped to push the major indexes down more than 10% to finish the quarter, leaving many investors very nervous over what the market holds for the second half of the year.

The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, slid by 4.60 points, or 0.5%, to finish the second quarter down 4.4% on the year. Trading volume was once again heavy, and losers outnumbered winners by close to three-to-one.

One of the biggest losers in the ETFdb 60 was the PowerShares S&P 500 BuyWrite Portfolio (PBP), which sank by 4% to close out the month. Wednesday was a “quadruple witching” day, marking the simultaneous expiration of stock index futures, single stock futures, stock options, and stock index options. PBP is one of the more unique ETFs on the market, pursuing a “covered call” strategy on the S&P 500. This involves establishing long position indexes to the S&P 500 and the sale of S&P 500 call options [read more about PBP on its fact sheet page].

The biggest gainer in the ETFdb 60 today was the PowerShares DB Agriculture Fund (DBA), which surged higher by 1.7%. This increase was largely due to a surge in corn prices, which jumped by close to 9% in Wednesday trading. This spike came as the Department of Agriculture released corn harvest and acreage figures, revealing that analysts had grossly overestimated the U.S. corn crop by close to 500 million bushels. This was good news for DBA investors, since corn futures make up roughly 6.3% of the fund’s total holdings [see more holdings of DBA here].

Disclosure: No positions at time of writing.