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The fourth quarter has been marked with heightened volatility. While solid corporate earnings and an improving economy backed by a healing job market, rising consumer confidence and higher wages have driven the market higher, inflationary pressures, the Omicron variant of COVID-19 and Fed’s taper plans are weighing on investors’ sentiment (read: 5 ETF Areas Up At Least 70% in 2021).
Against such a backdrop, ETFs continued to gain investors’ attraction, leading to huge growth and enough liquidity. In fact, these ETFs — ProShares UltraPro Short QQQ (SQQQ - Free Report) , SPDR S&P 500 ETF Trust (SPY - Free Report) , Financial Select Sector SPDR Fund (XLF - Free Report) , Invesco QQQ Trust (QQQ - Free Report) , and ProShares Ultra VIX Short-Term Futures ETF (UVXY - Free Report) — have seen higher average volumes over the past three months and are thus the top five funds by trading volume, per etfdb.com.
This is especially thanks to its unique strategies, creativity, transparency, diversification benefits, enhanced tax competences, low turnover and of course low cost.
The liquidity of the ETF is determined by its composition and trading volume of the underlying securities that make up its portfolio. Additionally, the trading volume of the ETF and the investment environment depend on its liquid factor. The funds that can easily be purchased and sold on the market indicate enough liquidity. Volume, or the number of shares traded in a particular period, is definitely the most-important consideration for determining the liquidity of a particular fund. A higher number of shares provides easy access to move in and out of the product, keeping the bid/ask spread tight.
Further, greater volume ensures easy creation and redemption of shares in the fund basket, which is a regular and vital mechanism in ETFs. This is especially true as authorized participants have the ability to create new baskets of ETF shares for underlying securities or redeem them when required. This phenomenon allows ETFs to trade in line with their net asset value.
We profiled ETFs in detail below:
ProShares UltraPro Short QQQ (SQQQ - Free Report) - Average Daily Volume: 135.5 million shares
ProShares UltraPro Short QQQ provides three times inverse exposure to the daily performance of the Nasdaq-100 Index, which measures the performance of the largest domestic and international non-financial companies listed on the Nasdaq. The fund seeks to profit from a market decline.
ProShares UltraPro Short QQQ has AUM of $1.6 billion and charges 95 bps in annual fees.
SPDR S&P 500 ETF Trust (SPY - Free Report) - Average Daily Volume: 80.3 million shares
SPDR S&P 500 ETF tracks the S&P 500 Index and holds 505 stocks in its basket, with each accounting for no more than 7% of assets. SPDR S&P 500 ETF Trust is heavy on the information technology sector, while healthcare, consumer discretionary, financials and communication services round off the next four spots with a double-digit allocation each (read: 5 ETFs Most Loved by Investors Last Week).
SPDR S&P 500 ETF Trust charges investors 9 bps in annual fees and has AUM of $431.6 billion. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Financial Select Sector SPDR Fund (XLF - Free Report) - Average Daily Volume: 59 million shares
The ultra-popular Financial Select Sector SPDR Fund seeks to provide exposure to 67 companies in banks, capital markets, insurance, diversified financial services, and consumer finance.
Financial Select Sector SPDR Fund has AUM of $42.7 billion and charges 12 bps in annual fees. It carries a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: Fed Speeds Up Taper Plans: Sector ETFs to Gain).
Invesco QQQ Trust (QQQ - Free Report) - Average Daily Volume: 50.3 million shares
Invesco QQQ provides exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Invesco QQQ is heavily concentrated on the top two firms with a double-digit allocation while its other firms hold no more than 7.1% of assets. The product is also heavily tilted toward information technology at 50.7% while communication services and consumer discretionary round off the next two spots.
Invesco QQQ is one of the largest and most-popular ETFs in the large-cap space with AUM of $207.2 billion and charges investors 20 bps in annual fees. QQQ has a Zacks ETF Rank #2 with a Medium risk outlook.
ProShares Ultra VIX Short-Term Futures ETF (UVXY - Free Report) – Average Daily Volume: 47.9 million shares
ProShares Ultra VIX Short-Term Futures ETF offers exposure to one and one-half times (1.5X) the daily performance of the S&P 500 VIX Short-Term Futures Index. It seeks to profit from increases in the expected volatility of the S&P 500, as measured by the prices of VIX futures contracts.
ProShares Ultra VIX Short-Term Futures ETF has accumulated $731.8 million and charges 95 bps in annual fees.
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5 Most-Heavily Traded ETFs of Fourth Quarter
The fourth quarter has been marked with heightened volatility. While solid corporate earnings and an improving economy backed by a healing job market, rising consumer confidence and higher wages have driven the market higher, inflationary pressures, the Omicron variant of COVID-19 and Fed’s taper plans are weighing on investors’ sentiment (read: 5 ETF Areas Up At Least 70% in 2021).
Against such a backdrop, ETFs continued to gain investors’ attraction, leading to huge growth and enough liquidity. In fact, these ETFs — ProShares UltraPro Short QQQ (SQQQ - Free Report) , SPDR S&P 500 ETF Trust (SPY - Free Report) , Financial Select Sector SPDR Fund (XLF - Free Report) , Invesco QQQ Trust (QQQ - Free Report) , and ProShares Ultra VIX Short-Term Futures ETF (UVXY - Free Report) — have seen higher average volumes over the past three months and are thus the top five funds by trading volume, per etfdb.com.
This is especially thanks to its unique strategies, creativity, transparency, diversification benefits, enhanced tax competences, low turnover and of course low cost.
The liquidity of the ETF is determined by its composition and trading volume of the underlying securities that make up its portfolio. Additionally, the trading volume of the ETF and the investment environment depend on its liquid factor. The funds that can easily be purchased and sold on the market indicate enough liquidity. Volume, or the number of shares traded in a particular period, is definitely the most-important consideration for determining the liquidity of a particular fund. A higher number of shares provides easy access to move in and out of the product, keeping the bid/ask spread tight.
Further, greater volume ensures easy creation and redemption of shares in the fund basket, which is a regular and vital mechanism in ETFs. This is especially true as authorized participants have the ability to create new baskets of ETF shares for underlying securities or redeem them when required. This phenomenon allows ETFs to trade in line with their net asset value.
We profiled ETFs in detail below:
ProShares UltraPro Short QQQ (SQQQ - Free Report) - Average Daily Volume: 135.5 million shares
ProShares UltraPro Short QQQ provides three times inverse exposure to the daily performance of the Nasdaq-100 Index, which measures the performance of the largest domestic and international non-financial companies listed on the Nasdaq. The fund seeks to profit from a market decline.
ProShares UltraPro Short QQQ has AUM of $1.6 billion and charges 95 bps in annual fees.
SPDR S&P 500 ETF Trust (SPY - Free Report) - Average Daily Volume: 80.3 million shares
SPDR S&P 500 ETF tracks the S&P 500 Index and holds 505 stocks in its basket, with each accounting for no more than 7% of assets. SPDR S&P 500 ETF Trust is heavy on the information technology sector, while healthcare, consumer discretionary, financials and communication services round off the next four spots with a double-digit allocation each (read: 5 ETFs Most Loved by Investors Last Week).
SPDR S&P 500 ETF Trust charges investors 9 bps in annual fees and has AUM of $431.6 billion. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Financial Select Sector SPDR Fund (XLF - Free Report) - Average Daily Volume: 59 million shares
The ultra-popular Financial Select Sector SPDR Fund seeks to provide exposure to 67 companies in banks, capital markets, insurance, diversified financial services, and consumer finance.
Financial Select Sector SPDR Fund has AUM of $42.7 billion and charges 12 bps in annual fees. It carries a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: Fed Speeds Up Taper Plans: Sector ETFs to Gain).
Invesco QQQ Trust (QQQ - Free Report) - Average Daily Volume: 50.3 million shares
Invesco QQQ provides exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Invesco QQQ is heavily concentrated on the top two firms with a double-digit allocation while its other firms hold no more than 7.1% of assets. The product is also heavily tilted toward information technology at 50.7% while communication services and consumer discretionary round off the next two spots.
Invesco QQQ is one of the largest and most-popular ETFs in the large-cap space with AUM of $207.2 billion and charges investors 20 bps in annual fees. QQQ has a Zacks ETF Rank #2 with a Medium risk outlook.
ProShares Ultra VIX Short-Term Futures ETF (UVXY - Free Report) – Average Daily Volume: 47.9 million shares
ProShares Ultra VIX Short-Term Futures ETF offers exposure to one and one-half times (1.5X) the daily performance of the S&P 500 VIX Short-Term Futures Index. It seeks to profit from increases in the expected volatility of the S&P 500, as measured by the prices of VIX futures contracts.
ProShares Ultra VIX Short-Term Futures ETF has accumulated $731.8 million and charges 95 bps in annual fees.