Daily ETF Roundup: DBA Soars On Commodity Strength, EWY Sinks On Kim Jong Il’s Death

by on December 19, 2011 | ETFs Mentioned:

Wall Street started off another week in the dumps, as markets took a nosedive to end today’s trading session. By the time the day came to a close, the Dow had lost just over 100 points while the S&P 500 suffered losses of 1.2%. Gold experienced yet another rough day as investors have seemingly lost confidence in what was once considered one of the last safe haven investments on the market. Many feel that a flailing euro and uncertain equities means that gold may be headed for losses, with the precious metal dipping 0.2% on the day. Despite the losses that most equities saw, crude oil was able to jump about 0.4% as the commodity remains at what many feel is a depressed price [see also 12 High-Yielding Commodities For 2012].

The financial sector led losses on the day as Bank of America saw its prices dip below $5 for the first time in almost three years. “Warnings of deteriorating conditions in the euro zone and concerns about tougher capital rules that could cut into big banks’ profits pressured the financials throughout the day” writes Reuters. On top these warnings, it appears that ECB asset purchasing is off the table for some of the more indebted nations, scaring investors as this may be a sign of dark days to come. In an effort to keep readers educated on today’s tumultuous markets, we outline two of the most notable ETF performances on the day [see also Cost Competition: Inflows Surge For Cheap ETFs].

One of the biggest ETF winners on the day came from the DB Agriculture Fund (DBA), which jumped by nearly 1.4% on the day. DBA’s performance proves the importance of commodity holdings in a portfolio, as it outperformed most equities on the day. This ETF holds a number of popular contracts including corn, soybeans, sugar, cattle, and cocoa. Nearly all of its underlying holdings enjoyed strong days with gains in soybeans (0.64%), corn (3.1%), and cattle (2.4%) contracts among others. This product is still down roughly 14.4% on the year as 2011 has wreaked havoc on commodities [see also How To Lose Money Investing In Commodities]. 


One of the biggest ETF losers on the day came from the MSCI South Korea Index Fund (EWY) as news emerged that North Korean dictator Kim Jong Il had passed away. The death of this leader means that South Korea’s neighbors will be extremely unstable and unpredictable, spooking investors away from the quasi-developed market. The future leaves a number of unanswered questions not only for North Korea, but for the entire world as many are unsure of how this nation will move forward with a new leader, and if radical changes are soon to come. EWY lost 4.4% on the day and figures to remain in the spotlight for the foreseeable future [see also Country ETFs With Rock Bottom Unemployment Rates]. 


Disclosure: No positions at time of writing.