Use Caution When Trading These Three Illiquid ETFs

By
May 25, 2012
Share:

 

There are many ETFs available to investors, but those looking to stay clear of illiquid funds may want to keep an eye on funds with wide bid/ask spreads and poor volume in their underlying securities, according to an article on Zacks.

The following funds, highlighted in the Zacks article, may be in danger of becoming illiquid, causing trading costs to begin piling up:

  • GS Connect S&P GSCI Enhanced Commodity ETN (NYSEArca: GSC): Though the fund has over $70 million in AUM and trades close to 16,000 shares daily, GSC scares buyers away with its 1.17 percent bid/ask spread ratio along with a high 1.25 expense ratio.
  • ETF Securities Physical Asian Gold Shares (NYSEArca: AGOL): Even with its large AUM, AGOL only moves an average of 790 shares daily and has a bid/ask spread of 0.8 percent.
  • iShares MSCI Kokusai Index Fund (NYSEArca: TOK): The fund holds over half a billion in AUM, but only has 10,000 shares changing hands each day, with a bid/ask ratio of over 0.8 percent.

 

For the full breakdown on the funds mentioned, visit Zacks.com.

ETF.COM CHANNELS

Learn why commodity ETFs are an essential part of a diversified portfolio with our Commodity ETFs channel.

Learn why bond ETFs are an essential part of a diversified portfolio with our bond ETF channel.

ETF DAILY DATA

The ETF tracking the Dow Jones industrial average was the inflows leader on Thursday, Feb. 4.

ETF issuers saw little movement in their asset totals on Thursday, Feb. 4.

ETF.COM ANALYST BLOGS

By Matt Hougan

Here's why you should attend the largest ETF conference in the world next month.

By Dave Nadig

Barclays built in a premium to this exchange-traded note, so back away.

By Sumit Roy

Why this probably isn't the start of a bear market.

By Dave Nadig

Many challenges ahead for the rapidly growing industry.

ETF INDUSTRY PERSPECTIVE

By Heidi Richardson

Opportunities in Germany and the eurozone.

By Shirish Malekar

How to protect your portfolio with liquid alts.