If not for major economic issues like the collapse in oil prices, the pullback in the Chinese economy and the liftoff of interest rates, the continued rise of exchange-traded funds would compete for the top financial story in 2015.
Despite questions surrounding the August 24 ETF "flash crash," when the prices of some ETFs declined well below their net asset value at the beginning of the day’s trading, investors continued to flock to these products. In response, a flood of new ETFs were introduced throughout the year—but most of the top 15 ETFs by trading volume are tried-and-true favorites of investors, according to a list pubished by New York-based global ETF research firm XTF.
In fact, the top three ETFs were rather vanilla index funds.
XTF ranked funds by their average daily trading volume in dollars. For comparison, we've included the average daily volume by shares as reported by Morningstar on Wednesday.
15. VelocityShares Daily Inverse VIX Short Term ETN – XIV
Average daily volume: $869 million
The VelocityShares Daily Inverse VIX Short Term ETN, which tracks the inverse of VXX, was also popular among traders during the volatility in the second half of 2015.
The fund experienced an average volume of 22.9 million shares per day.
14. Market Vectors Trust Gold Miners – GDX
Average Daily Volume: $874 million
As it lost 75 percent of its value in the third quarter amid sagging commodity prices, the Market Vectors Trust Gold Miners ETF was traded heavily by institutional investors and bargain hunters alike, with an average daily volume of 50.9 shares traded.
13. Financial Select Sector SPDR Fund – XLF
Average Daily Volume: $966 million
Perhaps investors trying to play the much-anticipated Fed interest rate hike announcement chose XLF as their vehicle—the fund’s 1.8 percent dividend yield over the past 12 months may also be an attraction. The low-cost ETF traded briskly, with an average daily volume of 36 million shares a day.
12. Health Care Select Sector SPDR Fund – XLV
Average Daily Volume: $989 million
The Health Care Select Sector SPDR Fund proved popular with traders in 2015 as many analysts predicted that the implementation of the federal Affordable Care Act would drive growth in health care. Those with a bearish view on the economy may see XLV as a safe harbor from whatever financial storms 2016 brings. This ETF had an average daily volume of 11.7 million shares a day.
11. iShares Core S&P 500 ETF – IVV
Average Daily Volume: $1 billion
SPY’s younger, smaller, less-expensive cousin, the iShares Core S&P 500 ETF, is still a behemoth at $71 billion in assets, making it the second-largest ETF in the world. On average, 4.4 million shares of IVV were traded each day in 2015.
10. iShares China Large-Cap ETF – FXI
Average Daily Volume: $1.02 billion
The iShares China Large-Cap ETF, the largest China ETF in the market, had a volatile 2015 as doubts about the health of the Chinese economy mounted. This fund was a heavy trader, with 22.8 million shares changing hands each day on average.
9, iShares 20+ Year Treasury Bond ETF – TLT
Average Daily Volume: $1.04 billion
The iShares 20+ Year Treasury Bond ETF was a popular option for traders eyeing the Fed’s move on interest rates. TLT’s rank seems to be driven more by its share price than its volume: The fund traded 9 million shares per day on average in 2015.
8. SPDR Dow Jones Industrial Average ETF – DIA
Average Daily Volume: $1.19 billion
DIA, a fund that consistently trades heavily, may have seen higher volume in 2015 as the impact of weakening commodities, interest rate uncertainty and slowing emerging market economies weighed on investors. This mega-ETF saw an average of 6.2 million shares change hands each day of 2015.
7. Energy Select Sector SPDR Fund – XLE
Average Daily Volume: $1.29 billion
After dropping more than 20 percent in NAV across 2015, it makes sense that the XLE made the list. Plummeting oil prices combined with a glut in reserves played a primary role in the sector’s difficulties. The Energy Select Sector SPDR Fund traded a whopping 19 million shares a day.
6. iShares MSCI EAFE ETF – EFA
Average Daily Volume: $1.37 billion
EFA is one of the largest ETFs, including stocks from Europe, Australia and the Far East, and it was traded heavily as a bailout plan for the ailing Greek economy inched towards fruition and as monetary policies between the ECB and the Fed diverged. An average of 20 million EFA shares changed hands each day.
5. iPath S&P 500 VIX Short-Term Futures ETN – VXX
Average Daily Volume: $1.46 billion
Traders used the VXX to play third- and fourth-quarter market volatility stemming from uncertainty around U.S. interest rates, commodities and the health of emerging markets. On average, investors traded 56 million VXX shares per day in 2015.
4. iShares MSCI Emerging Markets ETF – EEM
Average Daily Volume: $2.23 billion.
In 2015, the iShares MSCI Emerging Markets ETF lost around 25 percent of its NAV and investors heading to the exits may have pushed the fund’s high trading volume. However, respected analysts such as DoubleLine’s Jeff Gundlach argue that emerging markets may provided the best opportunity to improve future returns, and the fund may attract bargain hunters after pushing through six-year lows. On average, 57 million shares of EEM were traded daily.
3. PowerShares QQQ – QQQ
Average Daily Volume: $3.89 billion
Investors loved the Powershares QQQ—which tracks the Nasdaq 100—because it is tilted towards the large-cap tech stocks that were responsible for the bulk of the market’s positive activity for the year. Thirty-two million shares of QQQ changed hands each day on average in 2015
2. iShares Russell 2000 ETF – IWM
Average Daily Volume: $4.07 billion
Investors traded this appropriately-named ETF, which follows the small-cap heavy Russell 2000 index, to play on the market volatility that permeated the latter half of 2015. Each day, 32.5 million shares of IWM were traded on average.
1. SPDR S&P 500 ETF – SPY
Average Daily Volume: $26.86 billion
It comes as no surprise that SPY, the first and the largest ETF, was the most heavily traded fund in 2015. The great-grandfather of ETFs saw an average of 124 million shares change hands each day.