Some well-known exchange traded funds have been ensnared in the controversy surrounding Volkswagen AG (OTC: VLKAY), for the better and the worse.
The iShares MSCI Germany ETF (NYSE: EWG) and the First Trust NASDAQ Global Auto Index Fund (NASDAQ: CARZ) are among the notable ETFs that have been plagued by the precipitous drop in Volkswagen's American depositary receipts (ADRs). And as has been duly noted, no ETF has benefited from Volkswagen's woes in similar fashion to the ETFS Physical Palladium Shares (NYSE: PALL).
Volkswagen's woes have been a boon for PALL for a simple reason: Diesel automobiles require platinum for the production of catalytic converters, and it is diesel that has gotten Volkswagen in trouble. Palladium is used in the production of catalytic converters for gasoline-powered automobiles, so traders have bet what is bad for Volkswagen is good for palladium demand, powering PALL to a one-month gain of more than 19 percent.
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/www.benzinga.com/trading-ideas/long-ideas/15/10/5885775/an-overlooked-etf-caught-in-the-crosshairs-of-the-volkswagen- alt=An Overlooked ETF Caught In The Crosshairs Of The Volkswagen Scandal>Full story available on Benzinga.com
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