Volume Fell In July For Most-Liquid ETFs

August 07, 2013

The top three most liquid exchange-traded funds, beginning with the biggest and most liquid of all, the SPDR S&P 500 ETF (NYSEArca: SPY), suffered sharp declines in dollar trading volume from anywhere from one-fifth to nearly one-third—a sure sign of calm markets in the throes of the summer doldrums.

SPY, the oldest and biggest U.S.-listed ETF, that’s also the most liquid, suffered a 30 percent drop in dollar trading volume. About $400 billion worth of SPY shares were bought and sold last month, compared with $572 billion in June, according to data compiled by IndexUniverse. SPY, which launched in January 1993, ended July with $154 billion in assets.

Similarly, the dollar amount of iShares Russell 2000 ETF (NYSEArca: IWM) shares dropped 25 percent to $72 billion in July from $96 billion in June.

Also, liquidity in the iShares MSCI Emerging Markets ETF (NYSEArca: EEM) dropped 22 percent to $57 billion from $73 billion in June.

While a summer slowdown is partly to blame for the drop in liquidity, ETF trading volumes typically drop when markets aren’t terribly volatile, as IndexUniverse President of ETF Analytics Dave Nadig said in a recent blog titled “ETF Volumes Dive More Than Market.”




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