# Heavy volume on XBB and XSB



## james4beach (Nov 15, 2012)

I'm noticing some pretty heavy trading volume on XBB (most notably) and XSB, even some of the other bond ETFs like CLF, starting in August.

Any idea what's going on there? Perhaps someone with Level 2 quotes
http://stockcharts.com/h-sc/ui?s=XBB.TO&p=D&yr=0&mn=6&dy=0&id=p91285694575

By the way the American bond ETFs aren't showing the same thing, so it must be something Canada specific (?)


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## webber22 (Mar 6, 2011)

Barclays Capital Canada has been selling the amount of a normal daily volume for XBB and XSB from August 21st to 26th, so the volumes have doubled during that period. Today they unloaded a huge amount of the Horizons S&P/TSX 60 Index HXT


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## AGHFX (Aug 31, 2012)

Here's level 2 quotes today at a bit after 1:00 pm AST...

XBB:








XSB:


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## My Own Advisor (Sep 24, 2012)

Interesting stuff. Thanks for sharing.


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## sylyconvalley (Apr 22, 2013)

not that it matters.
why are you guys interested in level 2 if ur not daytraders?
just asking out of curiosity.


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## My Own Advisor (Sep 24, 2012)

Just interesting stuff sylyconvalley, nothing more. You're right, not a trader and I would be a horrible one at that.


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## sylyconvalley (Apr 22, 2013)

My Own Advisor said:


> Just interesting stuff sylyconvalley, nothing more. You're right, not a trader and I would be a horrible one at that.


fair enough.
take care.


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## james4beach (Nov 15, 2012)

Maybe it's a different kind of quote level I was thinking of but I thought you could also see the institutions doing the buying & selling. You can see this delayed info at tmxmoney for instance

I was curious as to whether there is one institution responsible for the heavy trading on these ETFs. The volume really is unusual.

I'm only able to see the last 25 trades on tmxmoney but perhaps by looking at more data you could get some useful info (about who's leading this heavy trading). From those 25 last trades I just see that RBC looks like a consistent buyer but that's too little a snapshot


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## james4beach (Nov 15, 2012)

The insanely heavy volume continues. Today (Sept 4),
XSB traded 1.7 million shares, more than 5x normal volume.
XBB traded 1.4 million shares, also 5x normal volume.

One thing I can think of is watching the overall fund size stats to see if this is accumulation or redemption or shares.

As of September 3:
XSB units outstanding 79,800,000 and assets under management $2,270,238,075
XBB units outstanding 56,400,000 and assets under management $1,686,247,925

Should be able to check back in a day or two and see if all this heavy volume is indicative of net subscriptions/redemptions... I suspect it must be ... otherwise it would indicate just open market trading


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## james4beach (Nov 15, 2012)

james4beach said:


> As of September 3:
> XSB units outstanding 79,800,000 and assets under management $2,270,238,075
> XBB units outstanding 56,400,000 and assets under management $1,686,247,925


As of September 4:
XSB units 79,700,000 and assets $2,266,336,220
XBB units 56,300,000 and assets $1,680,035,661

So that looks to me like 100,000 ETF units redeemed yesterday from each XSB and XBB (approx $3 million taken out of each fund) or $6 million redeemed from the two funds together. The funds shrank, independent of bond price moves. Am I reading this right?

Does anyone know if this is typical of these funds? I guess I'll keep watching... the question would be, are investors pulling funds out and are these funds shrinking (is that why there's so much volume in the last month)?


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## james4beach (Nov 15, 2012)

This article suggests by the way that what I'm seeing is indeed investors pulling lots of money out of bond funds
http://business.financialpost.com/2013/09/04/etf-industry-cools-off-in-august/



> “Now, with rates beginning to scale higher, investors are selling off bond funds aggressively.”
> 
> Mr. Chiefalo’s latest statistics show ETF outflows were $318-million in August, representing a drop of 0.5% to the industry’s total assets under management of $59.3-billion.
> 
> Fixed-income offerings had the toughest go last month, registering outflows of $400-million. Almost all of the selling was confined to rate-sensitive bond ETFs, with the two hardest-hit being iShares DEX All Corporate Bond Index Fund (TSX/XCB) and iShares DEX Universe Bond Index Fund (TSX/XBB).


Well mystery solved... there's your volume. The article left out XSB which appears to be getting hit pretty hard too.


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## james4beach (Nov 15, 2012)

Another article about foreign investors dumping Canadian bonds like crazy
http://www.theglobeandmail.com/repo...ailing-out-of-canadian-bonds/article13824390/

Largest decline in foreign held securities since 2007 and it's concentrated in bonds... wow.

At this point I'd say the clear contrarian trade would be to buy some Canadian bonds. I'm now looking to buy with intention of holding to maturity. I will not be buying a bond ETF as their high MERs make them unappealing


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