Exchange traded funds are getting more attention from investors following reports that ETF trading volume spiked last month. Leveraged ETFs in particular have drawn scrutiny, although claims they have boosted market volatility don’t hold water.
Average daily trading volume in ETFs vaulted 83% in August from the previous month to 2.24 billon shares, reports Inyoung Hwang for Bloomberg.
The increased market volatility has investors searching for opportunities to trade and hedge with ETFs. The spike in volume was the biggest monthly increase since January 2008.
“People didn’t care what stocks they owned,” said James Dailey of Team Financial Asset Management. “They weren’t picking stocks, but saying, ‘I want out of stocks, I’m shorting stocks or hedging,’ and they were doing it through ETFs.”