Institutional Investors Flee Emerging Market Bond ETFs | Main | “Cash Dash” May Suggest That Pan-ETF Selling Is Nearing Completion

“Window-Dressers” Sell Gold ETFs And Treasury Bond ETFs

28 September 2011 at 10:34 am by Staff     Bookmark and Share    Follow EtfExpert on Twitter

Is it a loss of confidence in gold that¬†has caused a¬†10%¬†sell-off over the previous 5 trading sessions? Have under-performing hedge fund managers been forced to liquidate the SPDR Gold Trust (GLD) — hedge fund managers like John Paulson who own¬†super-sized stakes in the¬†world’s largest gold ETF?

Data may suggest otherwise.

Futures traders have yet to close out positions¬†”en masse.”¬†Moreover,¬†physical gold holdings have hardly budged. And retail investors are holding firm to the notion that gold belongs in a portfolio, especially with the weak monetary policies of developed nations. Nevertheless,¬†the selling activity in precious metals is turning heads.

So what may be one of the big reasons for the correction in the yellow metal over the last 5 days? One possibility is that it¬†is¬†a form of window dressing. Specifically,¬†money managers don’t always need to acquire¬†positions to demonstrate that¬†they are holding winners;¬†they also need to demonstrate profitability in round-trip trades. And since the vast majority of round-trips may be losers right now,¬†selling some of the¬†”safer haven” success stories may be the only way to do it. (Note: Careful scrutiny of U.S. treasuries shows that the same profit-taking activity has pushed the¬†10-year treasury yield from 1.8%¬†back up to 2.05%.)

In “Dash For Cash”, Gold ETF Investors Hold On ‚Äď Frank Tang, Reuters
ETF Investing Doesn’t Have To Be Hard, Or ‘Granular’‚Äď Chuck Jaffe, Richmond Times
How Have The Top ETFs Of 2010 Performed So Far This Year? ‚Äď Matt Krantz, USA Today
Uranium ETF: Inflows Continue Post-Japan Nuclear Crisis ‚Äď Murray Coleman, Barron‚Äôs
RMB Vs DSUM: Comparing The New Dim Sum Bond ETFs ‚Äď Ron Rowland, Invest With An Edge ¬†

 

 

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Disclosure Statement: ETF Expert¬†is a web log (‚ÄĚblog‚ÄĚ) that makes the world of ETFs easier to understand. Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. Gary Gordon, Pacific Park Financial, Inc, and/or its clients may hold positions in the ETFs, mutual funds, and/or any investment asset mentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial, Inc. or its subsidiaries for advertising at the ETF Expert web site. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert disclosure details here.

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