While it's still early in the year, one thing is clear: 2017 has so far been a "buy and hold" market rather than a "trading" market. With stocks on a one-way trip higher through January and February, there's been little reason for investors to do anything but sit tight and count their gains.
In that context, it's little wonder that trading activity has slipped from last year's boisterous levels. Volume—a measure of how many shares trade hands on a given day—is averaging 6.6 billion across the major exchanges , year-to-date. That compares with 7.3 billion for all of 2016, which was a six-year high.
For some ETFs, the volume decline has been even worse than the aggregate numbers suggest. For example, the SPDR S&P 500 ETF (SPY) traded 72.3 million shares on average over the past 30 days. That may seem like a lot, but at this same time last year, the fund was trading well over 150 million shares per day. Even for 2016 as a whole, it traded north of 100 million shares per day.
Nipping On Heels Of 'SPY'
With the S&P 500 hitting fresh record highs seemingly daily, investors have sat patiently on their SPY positions. But even with its volume decline, the ETF is still the most actively traded ETF of all—but not by much.
In terms of total volume, there are a few ETFs nipping at the heels of SPY as investors chase hot market segments, hoping they can outperform the broader market. The VanEck Vectors Gold Miners ETF (GDX) and the Financial Select Sector SPDR Fund (XLF) are two of those funds, each providing exposure to very different areas of the market.
GDX has been a winner this year as gold prices jumped 7%. At the same time, XLF found favor among investors thanks to the widely held belief that financials will do well under a Trump administration. Both funds have a 30-day average volume of about 61.5 million shares traded per day.