Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

ETFs And The Olympics: Trade-Worthy Opportunity?

By Benzinga (Benzinga )ETFsJul 19, 2012 08:16AM ET
ETFs And The Olympics: Trade-Worthy Opportunity?
By Benzinga (Benzinga )   |  Jul 19, 2012 08:16AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
In just eight days, the Summer Olympics commence in London. Regardless of Great Britain's medal count, it is clear being the host nation for major international sporting competitions does provide an economic benefit to that country.

As far as ETFs are concerned, there are plenty of choices for Summer Olympics exposure. That is just the corporate nature of sports these days.

Traders looking for more actionable ideas would do well to commit to some homework and look at the performances of various country ETFs after those nations hosted the Olympics. In other words, some quick research can confirm dispel the notion of an "Olympics Effect." And do not worry about the research, it is provided here.

Atlanta 1996 In this case, the best ETF to look is the SPDR S&P 500 (NYSE: SPY). SPY first burst onto the scene in 1993, so it was somewhat seasoned by the time the 1996 Summer Olympics rolled around. Those games ended on August 4, 1996. From August 9 through December 27, 1996, SPY, now the world's largest ETF by assets, jumped 14 percent.

The Olympics may have contributed to SPY's good fortune, but it is unlikely the games were the driving force behind the ETF's returns. A bull market for stocks and a presidential election year probably meant more to SPY in 1996 than the Olympics did.

Sydney 2000 Talk about disappointing. The closing ceremony for the 2000 summer games was on October 1, 2000. From October 6 through December 29, 2000, the iShares MSCI Australia Index Fund (NYSE: EWA) was flat. Six months after the closing ceremony, EWA was down nearly 13 percent.

Nagano 1998 The iShares MSCI Japan Index Fund (NYSE: EWJ), the largest ETF tracking the world's third-largest economy, was around for the 1998 Winter Olympics, but the fund did not benefit much. EWJ fell 7.1 percent from a few days after the closing ceremony in late February 1998 through the year-end. In defense of EWJ, that decline arguably had more to do with the residual impact of the 1997 Asian financial crisis than the Olympics.

Turin 2006 These were certainly more sanguine times for Italy and the iShares MSCI Italy Index Fund (NYSE: EWI). Still, hosting the 2006 Winter Olympics did not do much for that ETF. EWI was trading around $15.60 immediately following the closing ceremony. By the end of the year, EWI was hovering around $14.60. That is still more than $4 better than where the downtrodden ETF closed on Wednesday.

Beijing 2008 Thanks to the global financial credit crisis, there was no post-Olympics bounce for the iShares FTSE China 25 Index Fund (NYSE: FXI), at least not immediately following the games. The closing ceremony was held on August 24, 2008. From August 28, 2008 through the end of the year, FXI lost 32.2 percent.

Vancouver 2010 The iShares MSCI Canada Index Fund (NYSE: EWC), the largest Canada-specific ETF, is the brightest spot among ETFs tracking Olympics host nations. After Vancouver hosted the 2010 winter games, EWC proceeded to surge 19.6 percent from early March 2010 through the end of the year.

Bottom line: With the U.K. in a recession, the Olympics will provide some much-needed stimulus to the economy there. That is almost a sure bet, but betting on a rally for the iShares MSCI United Kingdom Index Fund (NYSE: EWU) looks like a dicier proposition.

BY The ETF Professor
ETFs And The Olympics: Trade-Worthy Opportunity?

Related Articles

Mike Paulenoff
Upward Price Pressure In Retail ETF By Mike Paulenoff - Jun 01, 2021

Back on May 14, with SPDR® S&P Retail ETF (NYSE:XRT) trading at 89.56, we discussed the following technical (and macro) setup with our MPTrader members:  "My conclusion technically...

ETFs And The Olympics: Trade-Worthy Opportunity?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email