10 ETF Volume Leaders Of 2Q
Zacks Investment Research | Jun 28, 2017 11:02PM ET
The ETF industry has been roaring with explosive growth thanks to unique strategies, creativity, transparency, diversification benefits, enhanced tax competences, low turnover and low cost.
In particular, investors seek to trade in ETFs that can easily be purchased and sold on the market, suggesting that the fund should have enough liquidity. Volume, or the number of shares traded in a particular period, is definitely the most important determinant of 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 the ETF. This is especially true as authorized participants (AP) have the ability to create new baskets of ETFs for underlying securities or redeem them when required. This phenomenon allows ETFs to trade in line with their net asset value (NAV) (see: Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.