One of the defining attributes of exchange traded funds (ETFs) is their high liquidity, but which of them are among the most liquid of all?
Investors have a cornucopia of ETFs to choose from with 843 exchange-traded products currently available, writes Ron Rowland for Seeking Alpha. There are some oddballs that have trading sessions with zero volume and high bid/ask spreads. But there is also a select group known as the “ETF Billion Dollar Club” that has risen above the crowd in providing more than $1 billion per day in trades.
The average daily value traded (ADVT) is a good indicator for liquidity. It is the volume multiplied by price, and is sometimes referred to as $ Volume. Higher liquidity means there will most likely be someone out there willing to take the other side of a trade.
There are 17 members in this exclusive club as of February, 2009:
- SPDR S&P 500 (SPY): ADVT of $30,767,683,584
- PowerShares QQQ (QQQQ): $5,251,502,080
- ProShares UltraShort Financials (SKF): $4,627,046,400
- ProShares UltraShort S&P500 (SDS): $4,580,779,008
- iShares Russell 2000 (IWM): $3,093,236,480
- DIAMONDS Trust (DIA): $2,625,997,824
- SPDR Gold Trust (GLD): $2,470,299,648
- SPDR Select Sector Financial (XLF): $2,082,540,544
- ProShares Ultra S&P 500 (SSO): $1,905,811,200
- SPDR Select Sector Energy (XLE): $1,795,240,832
- iShares MSCI Emerging Markets (EEM): $1,746,615,296
- ProShares UltraShort Real Estate (SRS): $1,577,850,496
- ProShares UltraShort QQQ (QID): $1,458,607,744
- iShares Dow Jones U.S. Real Estate (IYR): $1,244,349,184
- iShares MSCI EAFE (EFA): $1,222,589,568
- Direxion Financial Bear 3x Shares (FAZ): $1,221,666,944
- United States Oil Fund (USO): $1,034,414,528
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.