Greece ETFs Now for Speculative Use Only

(Bloomberg) — As U.S. investors tear into an exchange- traded fund tied to Greek equities, in Europe theyre going without, at least on public venues.

Thats because the Lyxor ETF FTSE Athex 20, which tracks the FTSE Athex 20 Index and has listings in Germany, France and Italy, is halted, according to the countries exchanges. Trading in the security was suspended by regulators in Frankfurt after it fell as much as 20 percent June 29. It never started in Milan and Paris.

With the Greek market shut until July 6, ETFs tracking the nations shares become vehicles for pure speculation, the only way to bet on what stocks will do when Athens reopens. In the U.S., more than 6 million shares of the Global X FTSE Greece 20 ETF changed hands on Monday, six times the average for 2015.

Deutsche Boerse AG said the trading in the Lyxor security was halted at the request of German financial regulator Bafin, according to Frank Herkenhoff, the exchanges spokesman. Borsa Italiana suspended the ETF because the Greek market was closed, the exchanges Oriana Pagano said.

While the Greek fund in the U.S. has had no such halt, anyone trading it is doing so with incomplete information for at least a week as regulators closed the Athens Stock Exchange.

ETFs, the fastest-growing segment of the money-management business, are bundles of securities that change hands on an exchange like stocks. In normal times, they move in tandem with indexes that reflect prices for public companies and rarely veer from those levels by more than a few percentage points.

No such prices will be available in Greece for as long as its markets are closed.

For the companies that manage ETFs, an extended closure complicates the process through which they balance supply and demand for the funds while keeping its price aligned with other assets.