As the markets digested a Donald Trump presidential election win, investors turned to exchange traded funds to quickly capitalize on potential areas of growth.
Convergex Chief Executive Eric Noll said that clients were trading almost three times more ETFs on Wednesday, the day after the election, than they did on Tuesday while total share trading jumped 50%, the Wall Street Journal reports.
“In times of market stress, traders and institutions have to adjust their portfolios quickly. The easiest way for people to refocus their portfolios without picking individual stocks is ETFs,” Noll told the WSJ. “We’ve seen this trend developing over the past couple of years and it is really picking up steam now.”
After Trump’s upset win, almost 3.2 billion shares of ETFs were traded Wednesday, or more than double the usual volume, as traders tried to prognosticate which areas of the market would benefit the most from a Trump administration’s regulations, trade policy and spending through ETFs.
For instance, Trump’s pledge to repeal financial regulations imposed under Dodd-Frank helped the Financial Select Sector SPDR (NYSEArca: XLF) see $5 billion change hands on Wednesday, the most daily activity in five years.