Matt Hougan, chief executive of ETF.com, says his inbox lit up with people complaining about odd ETF trading Monday. He decided to run a screen for ETFs that were down more than 35% and found seven. Four of those were small, and odd trading occurs often in such ETFs, but the decline in the other three did appear to be anomalous. Guggenheim S&P 500 Equal Weight ETF, for example, simply holds equal weights of stocks in the S&P 500 index and should not have fallen by that magnitude. According to Mr. Hougan, “It probably should have been down 6% on the open, but it proceeded to trade down more than 40%.”
“There needs to be a deeper examination of how the stock-market circuit breakers behaved on Monday,” said Joel Dickson, a senior investment strategist at Vanguard Group. “There was a major market-structure component to what happened.