ETF Chart of the Day: European Bonds

December 5th at 12:53pm by Paul Weisbruch, Street One Financial

It is no secret that the European equity markets have rallied nicely in the past month, with IEV (iShares Europe 350) rallying 16.06% year to date and up 3.60% just in the trailing one month period.

IEV is top weighted towards familiar companies such as Nestle SA (3.12%), HSBC Holdings (2.73%), Novartis AG (2.48%), BP (2.07%), and Roche Holding AG (2.06%).

Meanwhile, the Euro currency as measured by FXE (CurrencyShares Euro), is now up 0.70% YTD and challenging its highest levels since September.

IEV on the other hand is also threatening to eclipse September highs. Clearly, appetites towards the European markets have become more bullish in the past few months, and an often overlooked segment of European ETP exposure is that of sovereign bonds.

Funds such as BUNL (PowerShares DB German Bund Futures ETN) and GGOV (ProShares German Sovereign/SubSovereign), BUND (PIMCO Germany Bond Index), and ITLY (PowerShares DB Italian Treasury Bond Futures ETN) all come to mind as clear examples of how the ETF industry continues to innovate and explore various investment opportunities out there.

All four of these products are trading near multi-month highs if not all time highs (as is the case with BUND and ITLY) and none of these funds are more than 2 years old.

In fact, as BUNL and ITLY both debuted in March of 2011, while BUND came later (November of 2011), and GGOV launched in January of this year. Not surprisingly, these funds basically “trade by appointment” when measuring average daily trading volume because these funds are quite new to the marketplace and thus are evading the majority of RIA/institutional screens at this point (likely a function of lower average daily trading volume and lower assets under management bases), but ample liquidity is available when trading through the proper channels.

PIMCO Germany Bond Index

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

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