By Richard Bloch
In a ZeccoShare discussion on thinly traded ETFs, Bloominonion noted that although there are more than 1,000 ETFs, only a small fraction of those have an average volume of more than 100,000 shares per day.
As Bloominonion points out:
If you stick with 100K and greater average volume over 20 days or longer, you’ll be OK, usually, with bid/ask of a penny, except for bond funds.
I think decent volume like this is also a sort of Good Housekeeping seal of approval for a reasonable ETF.
There are some weird ETF animals out there that most everyone should avoid, and low volume can be a clue about this.
There are various tools out there that can help you narrow down your ETF choices along the lines proposed by Bloominonion. He himself references Finviz for instance (which does great visualizations too) and there is the Zecco ETF Screener too of course,. No, there’s no actual “seal of approval” implied with any ETF, but I decided to take a look at sector ETFs that have enough liquidity to meet Bloominonion’s overall standards.
Note that I’m only focusing on sector ETFs. I’ll save other ETF categories (broad-based indexes, country funds, and others) for a future post.
So here are 45 sector ETFs (sorted by average volume) that seem to trade frequently enough to provide decent bid/ask spreads should you decide to buy or sell.
|Symbol||ETF||Market Cap (millions of dollars)||Average Volume (thousands of shares)|
|XLF||Financial Select Sector SPDR||5897||79086.8|
|XLI||Industrial Select Sector SPDR||3074||16809.0|
|XLE||Energy Select Sector SPDR||6559||14925.5|
|IYR||iShares Dow Jones US Real Estate||3171||12010.8|
|XRT||SPDR S&P Retail||618||11136.2|
|XLK||Technology Select Sector SPDR||5043||10979.4|
|XLB||Materials Select Sector SPDR||2276||9560.0|
|GDX||Market Vectors Gold Miners ETF||7328||8681.1|
|XLY||Consumer Discret Select Sector SPDR||1761||7271.3|
|XLP||Consumer Staples Select Sector SPDR||3098||7207.5|
|XLV||Health Care Select Sector SPDR||2816||7182.5|
|XLU||Utilities Select Sector SPDR||3929||7072.3|
|XHB||SPDR S&P Homebuilders||695||5581.9|
|XOP||SPDR S&P Oil & Gas Exploration & Prod||516||3755.3|
|KBE||SPDR KBW Bank||820||3645.4|
|XME||SPDR S&P Metals & Mining||768||3181.4|
|KRE||SPDR KBW Regional Banking||561||2890.4|
|VNQ||Vanguard REIT Index ETF||6138||2361.4|
|IYF||iShares Dow Jones US Financial Sector||456||1191.1|
|IYT||iShares Dow Jones Transportation Average||586||894.9|
|IYM||iShares Dow Jones US Basic Materials||892||818.8|
|IBB||iShares Nasdaq Biotechnology||1455||713.7|
|KIE||SPDR KBW Insurance||211||708.9|
|ICF||iShares Cohen & Steers Realty Majors||2224||685.0|
|IYZ||iShares Dow Jones US Telecom||711||630.9|
|ITB||iShares Dow Jones US Home Construction||350||466.7|
|PBW||PowerShares WilderHill Clean Energy||659||345.6|
|IEO||iShares Dow Jones US Oil & Gas Ex Index||327||260.4|
|PHO||PowerShares Water Resources||1328||244.7|
|RWR||SPDR Dow Jones REIT||1353||230.5|
|IXC||iShares S&P Global Energy||1099||202.8|
|IGW||iShares S&P North Amer Tech-Semicondctrs||268||202.4|
|RWX||SPDR Dow Jones Intl Real Estate||1316||192.6|
|IGE||iShares S&P North Amer Natural Resources||1763||189.7|
|IYW||iShares Dow Jones US Technology||1482||189.3|
|IYG||iShares Dow Jones US Financial Services||227||164.5|
|VFH||Vanguard Financials ETF||508||157.3|
|VGT||Vanguard Information Technology ETF||1298||154.3|
|XBI||SPDR S&P Biotech||524||138.5|
|IYE||iShares Dow Jones US Energy||711||133.5|
|IGN||iShares S&P North Amer Tech-Multimd Ntwk||194||111.9|
|XES||SPDR S&P Oil & Gas Equipment & Services||301||110.5|
|IHI||iShares Dow Jones US Medical Devices||459||105.2|
|PSP||PowerShares Listed Private Equity||253||103.9|
|IEZ||iShares Dow Jones US Oil Equipment Index||436||102.8|
Please note that I didn’t check each one to see if the average volume might be a fluke based on a recent spike in trading.
If you’re interested in any of these, you might want to review the chart to see if it does indeed trade frequently enough to suit your needs and that’s it’s not what Bloominonion might call a “weird ETF animal.”