Market Overview

Volume Spikes in Global Low Volatility ETF

Perhaps it is the latest sign of just how popular low volatility ETFs have become or maybe there is another catalyst.

Whatever the reasons may be, the PowerShares S&P International Developed Low Volatility Portfolio (NYSE: IDLV) easily fits the bill as an ETF trading on usually high volume Monday.

While the PowerShares S&P International Developed Low Volatility Portfolio is flat in late trading, more than 802,000 shares have changed hands in the ETF, roughly 27 times the daily average.

A possible explanation for the increased volume in IDLV is the ETF's exposure to Japan. IDLV allocates almost 28 percent of its weight to the world's third-largest economy and the ETF was previously highlighted as an alternative to pure-play Japan exposure.

Or IDLV's 14.4 percent weight to the U.K., which saw Fitch Ratings strip it of its AAA credit rating last Friday, could be the reason for the volume spike.

Another theory would be that investors are looking for exposure to multiple AAA-rated countries under the umbrella of one ETF. The CASSH countries of Canada, Australian, Singapore, Switzerland and Hong Kong, all AAA-rated, combine for about 49 percent of IDLV's weight.

Compared to other low volatility ETFs such as the PowerShares S&P 500 Low Volatility (NYSE: SPLV) and the iShares MSCI Emerging Markets Minimum Volatility Index Fund (NYSE: EEMV), IDLV is small and has lead a relatively anonymous existence.

The size aspect of that equation has quietly been changing for the better this year. IDLV entered Monday's session with $54.8 million in assets under management, $29.3 million of which has been accumulated this year, according to PowerShares data. In the past month alone, IDLV has hauled in more than $12.1 million in assets.

The modest move in IDLV shares today does not indicate a high level of excitement, but the volume could be a sign this ETF is one to keep an eye on in the near-term.

For more on ETFs, click here.

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