In a booming stock market, the ETF industry is seeing explosive growth piling up huge assets in recent years. This has resulted in enough liquidity in the ETF world with most of the funds trading at extremely higher volumes.
Volume can be determined by the number of shares traded in a particular period. A higher number of shares provides easy access to move in and out of a product, keeping the bid/ask spreads tight. In fact, 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 (AP) 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 (NAV). That said, we have highlighted 10 ETFs that have seen higher average volumes over the past three months and are thus the top 10 funds by trading volume, per etfdb.com (see: all the Category ETFs here). SPDR S&P 500 ETF ( SPY Quick Quote SPY - Free Report) – Average Daily Volume: 74.3 million shares This fund tracks the S&P 500 Index and holds 505 stocks in its basket with information technology, healthcare, consumer discretionary, financials and communication services being the top five, with a double-digit allocation each. The ETF charges investors 9 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Top-Ranked ETFs to Buy as S&P 500 Nears Record High). ProShares UltraPro Short QQQ ( SQQQ Quick Quote SQQQ - Free Report) – Average Daily Volume: 74.2 million shares This ETF provides three times (300% or 3X) inverse exposure to the daily performance of the Nasdaq-100 Index, charging 95 bps in annual fees. It has AUM of $1.9 billion. Financial Select Sector SPDR Fund ( XLF Quick Quote XLF - Free Report) – Average Daily Volume: 53.5 million shares This is the ultra-popular financial ETF with AUM of $42.2 billion. It seeks to provide exposure to 65 companies in the diversified financial services, insurance, banks, capital markets, mortgage real estate investment trusts, consumer finance, and thrifts and mortgage finance industries. The product charges 12 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: Record Inflows to U.S. ETFs This Year: 6 Winners). Invesco QQQ ( QQQ Quick Quote QQQ - Free Report) – Average Daily Volume: 43.4 million shares This product provides exposure to the 102 largest domestic and international companies, excluding financial stocks, by tracking the Nasdaq-100 Index. It has AUM of $169.6 billion and charges 20 bps in annual fees. Information technology takes the largest share at 489.4% while communication services and consumer discretionary round off the next two spots. The fund has a Zacks ETF Rank #2 with a Medium risk outlook. iShares MSCI Emerging Markets ETF ( EEM Quick Quote EEM - Free Report) – Average Daily Volume: 37.9 million shares This fund offers exposure to large and mid-sized companies in emerging markets. It follows the MSCI Emerging Markets Index and holds 1,232 securities. Among the emerging countries, China takes the top spot at 40% while Taiwan and South Korea round off the next two spots with a double-digit exposure each. The fund has AUM of $32.3 billion and charges 70 bps in annual fees. It has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook. ProShares UltraPro QQQ ( TQQQ Quick Quote TQQQ - Free Report) – Average Daily Volume: 34.2 million shares This is the most-popular ETF in the leveraged space with AUM of $11.6 billion and expense ratio of 0.95%. The fund seeks to deliver three times the return of the daily performance of the NASDAQ-100 Index. Energy Select Sector SPDR ( XLE Quick Quote XLE - Free Report) – Average Daily Volume: 30.4 million shares This is the largest and most-popular ETF in the energy space with AUM of $24.4 billion and expense ratio of 0.12%. The fund follows the Energy Select Sector Index and holds 22 securities in its basket. It has a Zacks ETF Rank #2 with a High risk outlook (read: Can Energy Stocks & ETFs Continue Their Hot Streak?) iShares MSCI Brazil ETF ( EWZ Quick Quote EWZ - Free Report) – Average Daily Volume: 30 million shares This fund targets the Brazilian stock market and follows the MSCI Brazil 25/50 Index. Holding 54 stocks in the basket, financials and materials dominate the fund’s return at 25% each, followed by energy (12.3%) and consumer staples (10.5%). The fund has amassed $6.7 billion in its asset base and charges 59 bps in fees per year from investors. It has a Zacks ETF Rank #5 (Strong Sell) with a High risk outlook. iShares Russell 2000 ETF ( IWM Quick Quote IWM - Free Report) – Average Daily Volume: 27.8 million shares It is one of the largest and the most-popular ETFs in the small-cap space with AUM of $68.7 billion. It tracks the Russell 2000 Index and holds 2,038 stocks in its basket with key holdings in healthcare, financials, industrials, consumer discretionary and information technology. The fund charges 19 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Fed Rate Hike in the Cards? ETFs to Buy). iShares Silver Trust ( SLV Quick Quote SLV - Free Report) – Average Daily Volume: 24.4 million shares The fund offers exposure to the day-to-day movement of the price of silver bullion. It is an ultra-popular silver ETF with AUM of $15.1 billion and charges 50 bps in fees per year from investors. SLV has a Zacks ETF Rank #3 (Hold) with a High risk outlook. 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