Seeking Alpha
Profile| Send Message|
( followers)  

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.”

Source: 45 Sector and Sub-Sector ETFs With Decent Liquidity