ETFs With The Highest & Lowest Trading Spreads

April 27, 2022

When it comes to holding an exchange-traded product (ETP), the expense ratio is all-important. When it comes to trading an ETP, another number matters more: the bid/ask spread. 

The spread between the bid (the highest price a buyer is willing to pay) and the ask (the lowest price a seller is willing to accept) is a significant part of an ETP's trading cost. (Trading costs are reflected on fund reports.) 

As a general rule, ETPs with significant assets and trading volume tend to have smaller spreads than ETPs with minimal assets and light volume. For example, the $388 billion SPDR S&P 500 ETF Trust (SPY), the largest and most liquid ETP in the world, has an average spread of 0.0032%—essentially zero. That’s great news for investors buying and selling the fund. 

SPY’s tiny spread is certainly not the norm for ETPs. Data compiled by shows that the average bid/ask spread for the more than 2,900 ETPs listed on U.S. exchanges is 0.52%. 

How Statistics Are Skewed 
The average is calculated by summing all ETP spreads and then dividing by the number of ETPs on the market. 

A plethora of thinly traded products with little to no assets and large spreads—many of them exchange-traded notes—such as the Elements Spectrum Large Cap US Sector Momentum Index ETN (EEH), the iPath Return On Disability ETN (RODI) and the Credit Suisse S&P MLP Index ETN (MLPO), inflates the average. 

That’s why some people prefer looking at the median ETP spread, which comes from lining up all the spreads from lowest to highest and taking the middle figure: 0.20%. 

Another figure to consider is the asset-weighted average spread, which is calculated by giving more weight to bigger ETPs. It is only 0.03% for U.S.-listed ETPs, much lower than the regular average, since investors have most of their money in large, liquid products. 

Those include the aforementioned SPY, as well as the Invesco QQQ Trust (QQQ), the SPDR Gold Trust (GLD) and theiShares Russell 2000 ETF (IWM), all of which have spreads of less than 0.01%. 


ETFs With The Lowest Spreads

Fund  Ticker  Spread (%)
SPDR S&P 500 ETF Trust SPY  0.0032
Invesco QQQ Trust  QQQ  0.0041
SPDR Gold Shares GLD  0.0065
Consumer Discretionary Select Sector SPDR Fund XLY  0.0068
iShares Russell 2000 ETF IWM  0.0069
Vanguard S&P 500 ETF VOO 0.0070
Health Care Select Sector SPDR Fund XLV  0.0076
iShares Core S&P 500 ETF IVV  0.0078
SPDR Dow Jones Industrial Average ETF Trust DIA 0.0079
Technology Select Sector SPDR Fund XLK  0.0082
iShares TIPS Bond ETF TIP  0.0083
iShares 3-7 Year Treasury Bond ETF IEI  0.0084
iShares 20+ Year Treasury Bond ETF TLT  0.0084
iShares iBoxx $ Investment Grade Corporate Bond ETF LQD  0.0089
iShares Short Treasury Bond ETF SHV 0.0091


ETFs With The Highest Spreads

Fund  Ticker  Spread (%)
Elements Spectrum ETN EEH  127.9171
iPath Return on Disability ETN RODI  46.8980
Credit Suisse S&P MLP Index ETN MLPO  19.5292
ETFMG 2x Daily Travel Tech ETF AWYX  8.1028
ETFMG 2X Daily Alternative Harvest ETF MJXL  7.9322
Volt Crypto Industry Revolution and Tech ETF BTCR  7.2334
First Trust Dow Jones International Internet ETF FDNI  5.4963
Cambria Global Tail Risk ETF FAIL  4.6417
Loncar China Biopharma ETF CHNA  4.3350
Simplify Volt Fintech Disruption ETF VFIN  4.2219
VectorShares Min Vol ETF VSPY  4.0141
Virtus Newfleet High Yield Bond ETF BLHY  3.9237
iPath Women in Leadership ETN WIL  3.8689
ELEMENTS Linked to the ICE BofAML Commodity Index eXtra Biofuels Total Return FUE  3.4259
FI Enhanced Europe 50 ETN FIEE  3.3010


Spreads By Asset Class 

As a group, fixed income ETPs tend to have the lowest spreads. The average bid/ask spread for the group is 0.25%, while the median spread is 0.14%. 

Equity ETFs also tend to have low spreads, with average and median spreads of 0.41% and 0.21%, respectively.  

On the flip side, alternatives ETPs and commodity ETPs are areas where spreads tend to be relatively high—over 0.5% on average—suggesting investors should use caution when buying and selling those types of products. 

Bottom Line 
Spreads are an important factor in determining the total cost of trading an ETP. Investors should be mindful of an ETP's bid/ask spread when buying or selling.  

To find out the average spread for a particular ETP, visit the fund page for the ETP in question at 


Follow Sumit on Twitter @sumitroy2 

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