Amid both peaks and troughs, the ETF industry is seeing explosive growth, courtesy of its unique strategies, creativity, transparency, diversification benefits, enhanced tax competences, low turnover and of course low cost. Additionally, rise in "thematic investing” and craze for “smart beta” have increased the popularity of ETFs.
Investors seek to trade in ETFs that can easily be purchased and sold on the market, suggesting that the funds should have 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. Higher number of shares provides easy access to move in and out of the product, keeping the bid/ask spreads tight (read: Best ETF Strategies for 2020). 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 (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). Nevertheless, assessing just the number of shares is not a profitable task, as a higher number of cheaper funds can be bought for a given amount of money, leading to increased volumes. As a result, honing in on dollar volume ETFs will reveal the true picture of liquidity. Dollar volume measures the number of shares traded multiplied by share price (see: all the Category ETFs here). That said, we have highlighted 10 ETFs that have seen higher dollar volume this year and are thus the top 10 volume leaders of 2019 per xtf.com. SPDR S&P 500 ETF SPY This fund tracks the S&P 500 Index and holds 505 well-diversified stocks in its basket with each holding less than 4.5% of the assets (read: A Look Back At S&P 500 Sector ETFs in 2019). Zacks ETF Rank #2 (Buy) Aggregate YTD Volume: $4,899.6 billion AUM: $299 billion Expense Ratio: 0.09% Top Sector: Information Technology (23%) YTD Returns: 29.6% Invesco QQQ QQQ This product provides exposure to the 103 largest domestic and international companies, excluding financial stocks, by tracking the Nasdaq-100 Index. It is concentrated on the top three firms that collectively make up for 32.7% of the assets. Zacks ETF Rank #1 (Strong Buy) Aggregate YTD Volume: $1,354.2 billion AUM: $84.9 billion Expense Ratio: 0.20% Top Sector: Information Technology (47.4%) YTD Returns: 36.5% iShares Russell 2000 ETF ( IWM Quick Quote IWM - Free Report) This ETF targets the small-cap segment by tracking the Russell 2000 Index and holds 1,979 stocks with each holding less than 0.4% of the assets (read: Small-Cap U.S. ETFs: Did the Year-End Rally Just Begin?). Zacks ETF Rank #3 (Hold) Aggregate YTD Volume: $728.1 billion AUM: $47.5 billion Expense Ratio: 0.19% Top Sector: Healthcare (17.8%) YTD Returns: 23.6% iShares MSCI Emerging Markets ETF EEM This fund targets emerging markets and follows the MSCI Emerging Markets Index. It holds 1,225 stocks in its basket, with none accounting for more than 5.8% share (read: Is it the Right Time to Buy Emerging Market ETFs for 2020?). Zacks ETF Rank #4 (Sell) Aggregate YTD Volume: $658.9 billion AUM: $28.7 billion Expense Ratio: 0.67% Top Sector: Financials (24.2%) YTD Returns: 13.1% iShares iBoxx $ High Yield Corporate Bond ETF HYG This ETF offers exposure to a broad range of U.S. high-yield corporate bonds by tracking the Markit iBoxx USD Liquid High Yield Index. Holding 1,003 securities, effective duration and average maturity come in at 2.84 and 3.25 years, respectively. Zacks ETF Rank #3 Aggregate YTD Volume: $417 billion AUM: $19.2 billion Expense Ratio: 0.49% Top Sector: Communications (24.3%) YTD Returns: 13.5% iShares MSCI EAFE ETF EFA This fund provides exposure to stocks in Europe, Australia, Asia and the Far East by tracking the MSCI EAFE Index. It holds 921 securities in its basket, with none holding more than 2.1% of assets. Zacks ETF Rank #3 Aggregate YTD Volume: $437.7 billion AUM: $63.4 billion Expense Ratio: 0.32% Top Sector: Financials (18.5%) YTD Returns: 21% Financial Select Sector SPDR XLF The fund targets the broad financial segment and follows the Financial Select Sector Index. It holds 67 stocks in its basket, with double-digit allocation to the top two firms (read: 5 Sector ETFs to Win After Robust November Jobs Data). Zacks ETF Rank #2 Aggregate YTD Volume: $349.5 billion AUM: $27.2 billion Expense Ratio: 0.13% Top Sector: N/A YTD Returns: 31.4% VanEck Vectors Gold Miners ETF GDX This product tracks the NYSE Arca Gold Miners Index, which measures the performance of companies involved in the gold-mining industry. Holding 45 stocks, it is concentrated on the top two firms with double-digit allocation each (read: Gold to Shine in 2020: ETFs to Consider). Zacks ETF Rank: N/A Aggregate YTD Volume: $330.7 billion AUM: $12 billion Expense Ratio: 0.52% Top Sector: N/A YTD Returns: 29.9% iShares 20+ Year Treasury Bond ETF TLT This fund provides exposure to long-term Treasury bonds by tracking the ICE U.S. Treasury 20+ Year Bond Index. It holds 38 securities in its basket with effective duration of 18.12 years and average maturity of 25.55 years (read: Treasury ETFs Rally on Trade Gyrations). Zacks ETF Rank: #4 Aggregate YTD Volume: $311.7 billion AUM: $18.1 billion Expense Ratio: 0.15% Top Sector: N/A YTD Returns: 15.9% iShares iBoxx $ Investment Grade Corporate Bond ETF LQD This fund offers exposure to a broad range of U.S. investment grade corporate bonds by tracking the Markit iBoxx USD Liquid Investment Grade Index. It holds 2,104 securities in its basket effective duration of 9.04 years and average maturity of 13.04 years. Zacks ETF Rank: #3 Aggregate YTD Volume: $289.9 billion AUM: $34.5 billion Expense Ratio: 0.15% Top Sector: N/A YTD Returns: 17.2% Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>