Daily ETF Roundup: VXX Tumbles, IWN Soars

by on May 12, 2010 | ETFs Mentioned:

Equity markets rose modestly in Wednesday trading, with the Dow gaining close to 1.4% and the Nasdaq gaining more than 2%. This sharp boost came after the Commerce Department reported that U.S. exports rose 3.2% in March to their highest level since October 2008. Among Dow components, Cisco Systems saw its shares rise by 3% after it reported a 63% jump in net income compared to a year ago. In the commodity markets, gold continued its unprecedented ascent higher, nearly reaching a level of $1250 an ounce as investors feared that the bailout in Europe would create higher levels of inflation.

The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through exchange-traded products, climbed 10.01 points, or 1.0%. Aggregate trading volume was under one billion shares for the first time in nearly a week, as activity continued to slow following last week’s chaos.

Some of the biggest gainers on the day were small cap securities; all variations of the Russell 2000 Index, including blend, value, and growth ETFs, all saw their shares by more than 3%. Leading the way was the iShares Russell 2000 Value Index Fund (IWN), which climbed close to 3.1%. This sharp rise in demand came after investors’ fears over the global economy faded on Wednesday, which helped to push more volatile assets like small caps into focus (see holdings of IWN here).

One of the biggest losers on the day was the iPath S&P 500 VIX Short-Term Futures ETN (VXX), which sank by close to 6.1% in Wednesday trading. This came after many investors gained confidence in the ability of the European bailout to stem the sovereign debt crisis for now. Over the past two weeks VXX has been soaring higher; it is up over 25% as markets have experienced sharply higher levels of volatility. However, the fund appears to be back on the downward trend that has seen this ETN sink by close to 70% over the past 52 weeks (see more fundamentals of VXX here).

Disclosure: No positions at time of writing.