Ahead of Sunday's elections in Greece, the Global X FTSE Greece 20 ETF (NYSE: GREK) is on the move again. Following Thursday's 12.5% surge on volume that was approximately quadruple the daily average, GREK soared almost 6% Friday on volume that was more than nine times the daily average.
Since the start of this week, GREK, the lone Greece-specific ETF, jumped 24.6%, leading to the ETF trading at intraday levels on Friday that were well above the fund's closing net asset value on Thursday. In updating a previous story, it must be noted that GREK closed at $11.53 on Friday, just 17 cents above its closing indicative value of $11.36. That brings GREK's closing price relative to its net asset value more in line with comparable ETFs tracking other European nations such as the iShares MSCI Italy Index Fund (NYSE: EWI) and the iShares MSCI Spain Index Fund (NYSE: EWP).
The danger of exchange-traded products trading at elevated premiums to their net asset values was highlighted earlier this year during the debacle involving the VelocityShares Daily 2x VIX Short-Term ETN (NYSE: TVIX).
TVIX's premium to its net asset value surged after Credit Suisse suspended share issuance in the ETN, a move that opened the door to traders exploiting the difference between the market price and TVIX's NAV. TVIX lose almost 30% on March 22 as a result.
Clearly, GREK is not facing a TVIX-esque event. Ahead of Sunday's elections in Greece, that's a good thing for lone ETF tracking the "G" in the PIIGS acronym because headline risk for Europe ETFs, GREK, included could be significant at the start of next week.
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This article was originally published on Benzinga, and is republished here with permission.
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