Which ETF has the highest liquidity?
ProShares UltraPro QQQ is the most popular and liquid ETF in the leveraged space, with AUM of $20.4 billion (read: A Guide to Nasdaq ETF Investing).
ProShares UltraPro QQQ is the most popular and liquid ETF in the leveraged space, with AUM of $20.4 billion (read: A Guide to Nasdaq ETF Investing).
| SCHEMES | 1 Wk Return (%) | 6 Mth Return (%) |
|---|---|---|
| DSP NIFTY 1D Rate Liquid ETF | 0.1 | 2.52 |
| ICICI Prudential S&P BSE Liquid Rate ETF | 0.11 | 2.72 |
| Nippon India ETF Nifty 1D Rate Liquid BeES | 0.1 | 2.52 |
| Liquid Fund Average | 0.13 | 2.96 |
ETFs offer three levels of liquidity—on-screen liquidity, broker-assisted liquidity and specialist-accessed liquidity. The average daily volume of an ETF shows only what has been traded, not what could have been traded.
Because they represent baskets of stocks, ETFs typically trade at much higher volumes than individual stocks. High trading volumes mean high liquidity, enabling investors to get into and out of investment positions with minimum risk and expense.
Both have the same expense ratio and similar dividend yield, so you should choose whichever one you prefer based on the fund's strategy. If you only want to own the biggest and safest companies, choose VOO. If you want broader exposure and more diversification, choose VTI.
Exchange-traded funds (ETFs) have higher liquidity than mutual funds, making them popular investment vehicles and convenient to tap into when cash flow is needed. The primary factors that influence an ETF's liquidity are its composition and the trading volume of the securities that make it up.
Which S&P 500 ETF has the highest volume? At the time of writing, the SPY ETF has considerably greater volume than the other two S&P 500 ETFs listed in this article.
| ETF | Assets Under Management | Expense Ratio |
|---|---|---|
| Vanguard Information Technology ETF (VGT) | $70 billion | 0.10% |
| VanEck Semiconductor ETF (SMH) | $16.3 billion | 0.35% |
| Invesco S&P MidCap Momentum ETF (XMMO) | $1.6 billion | 0.34% |
| SPDR S&P Homebuilders ETF (XHB) | $1.8 billion | 0.35% |
Secondary market liquidity is determined primarily by the volume of ETF shares traded. To assess secondary market liquidity, follow an ETF at different times of day, over various time periods, and note how it's affected by market environments.
What are the top three ETFs?
| Fund (ticker) | YTD performance | Expense ratio |
|---|---|---|
| Vanguard S&P 500 ETF (VOO) | 10.4 percent | 0.03 percent |
| SPDR S&P 500 ETF Trust (SPY) | 10.4 percent | 0.095 percent |
| iShares Core S&P 500 ETF (IVV) | 10.4 percent | 0.03 percent |
| Invesco QQQ Trust (QQQ) | 8.6 percent | 0.20 percent |
Market risk
The single biggest risk in ETFs is market risk. Like a mutual fund or a closed-end fund, ETFs are only an investment vehicle—a wrapper for their underlying investment. So if you buy an S&P 500 ETF and the S&P 500 goes down 50%, nothing about how cheap, tax efficient, or transparent an ETF is will help you.
Unlike index mutual funds, ETFs are flexible investment vehicles that are highly liquid. They can be bought and sold on a stock exchange throughout the trading day, just like individual stocks.
Cash is the most liquid asset, followed by cash equivalents, which are things like money market accounts, certificates of deposit (CDs), or time deposits.
| S.No. | Name | CMP Rs. |
|---|---|---|
| 1. | Infosys | 1411.25 |
| 2. | Indian Renewable | 160.70 |
| 3. | Jio Financial | 370.10 |
| Median: 3 Co. | 370.1 |
ETFs have differing liquidity profiles for many reasons. Investing in an ETF with relatively low liquidity may cost you in terms of a wider bid-ask spread, reduced opportunity to trade profitably, and—in extreme cases—an inability to withdraw funds in certain situations like a big market crash.
Investor Preferences: VOO is ideal for those seeking alignment with the performance of large-cap companies in the S&P 500, while VTI suits investors looking for more comprehensive market exposure, including smaller companies with potential for growth.
The performance of an investment option is often one of the most critical aspects investors consider. The performance of these two ETFs will be highly dependent on the performance of the information technology sector. If information technology significantly outperforms other sectors, then QQQ will outperform VOO.
VTI is an extremely diversified fund. Its large amount of holdings reflect the entire universe of investable U.S. securities. The fund has exposure to small-cap stocks which can be more volatile than mid- or large-cap holdings. The fund has a beta of 1.0 when compared to the larger market.
| Symbol | Name | 5-Year Return |
|---|---|---|
| IUS | Invesco RAFI Strategic US ETF | 14.75% |
| OEF | iShares S&P 100 ETF | 14.73% |
| SPHB | Invesco S&P 500® High Beta ETF | 14.58% |
| SPYG | SPDR Portfolio S&P 500 Growth ETF | 14.40% |
What is the downside of ETFs?
For instance, some ETFs may come with fees, others might stray from the value of the underlying asset, ETFs are not always optimized for taxes, and of course — like any investment — ETFs also come with risk.
You expose your portfolio to much higher risk with sector ETFs, so you should use them sparingly, but investing 5% to 10% of your total portfolio assets may be appropriate. If you want to be highly conservative, don't use these at all.
Liquidity of SPX and SPY Options
ETFs are known for being broad-based. Since SPY options have tighter markets, they are known to be more liquid than SPX options. SPY options usually feature a tighter speed between their bid and offer than SPX options making them more price efficient for traders and investors.
- SPDR S&P 500 ETF Trust (SPY).
- iShares Core S&P 500 ETF (IVV).
- Vanguard S&P 500 ETF (VOO).
- SPDR Portfolio S&P 500 ETF (SPLG).
- Invesco S&P 500 Equal Weight ETF (RSP).
It might be tempting to dabble with exotic or offbeat investments in the short term. But if you're looking to beat the S&P 500 over the long haul, one ETF stands apart: Invesco QQQ Trust (QQQ). The Invesco QQQ ETF, usually just called QQQ, is a top performer this year.
References
- https://time.com/personal-finance/article/best-way-to-invest-100k/
- https://www.fidelity.com/learning-center/investment-products/etf/risks-with-etfs
- https://byjus.com/commerce/liquid-assets/
- https://cleartax.in/s/best-liquid-funds
- https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/templates-business-guides/glossary/liquidity
- https://www.etmoney.com/learn/mutual-funds/which-is-better-liquid-funds-vs-liquid-etfs/
- https://www.accountingtools.com/articles/what-is-order-of-liquidity.html
- https://www.netsuite.com/portal/resource/articles/accounting/liquidity.shtml
- https://www.law.cornell.edu/wex/liquid_asset
- https://intercom.help/apexe3/en/articles/4161964-liquidity
- https://www.powercycletrading.com/spx-options-vs-spy-options-strategic-advantages/
- https://quizlet.com/explanations/questions/which-of-the-following-assets-is-most-liquid-a-stock-b-bond-c-loan-d-mutual-fund-e-cash-1b469f66-c68a-4bdc-afe1-4e172d3b11a6
- https://www.investopedia.com/articles/exchangetradedfunds/08/etf-liquidity.asp
- https://quizlet.com/explanations/questions/the-most-liquid-asset-is-a-sales-b-accounts-receivable-c-capital-d-marketable-securities-e-cash-a87e762a-8aee85b8-bc7f-4ddb-9220-892b13babd3a
- https://www.chegg.com/homework-help/questions-and-answers/following-least-liquid-asset-money-savings-account-money-pocket-real-estate-o-bonds-questi-q69297886
- https://www.bankrate.com/investing/best-etfs/
- https://etfdb.com/compare/highest-5-year-returns/
- https://www.investor.gov/introduction-investing/investing-basics/glossary/liquidity-or-marketability
- https://www.investopedia.com/articles/mutualfund/05/etfindexfund.asp
- https://www.sofi.com/learn/content/what-are-liquid-assets/
- https://www.nerdwallet.com/article/investing/sp-500-etfs
- https://www.bis.org/press/p130106a.pdf
- https://www.brex.com/journal/what-are-liquid-assets
- https://smartasset.com/investing/liquid-assets
- https://homework.study.com/explanation/which-type-of-account-is-typically-the-most-liquid-a-checking-account-b-savings-account-c-certificate-of-deposit-d-exchange-traded-fund.html
- https://www.fool.com/terms/l/liquidity/
- https://www.investopedia.com/articles/investing/122315/vti-vanguard-total-stock-market-etf.asp
- https://homework.study.com/explanation/what-assets-are-current-assets-which-of-these-assets-are-least-liquid-why.html
- https://gocardless.com/guides/posts/liquidity-in-accounting/
- https://www.tiaa.org/public/learn/personal-finance-101/how-much-of-my-income-should-i-save-every-month
- https://finance.yahoo.com/news/10-return-investment-roi-141300511.html
- https://homework.study.com/explanation/which-of-the-following-is-are-the-most-liquid-of-a-company-s-assets-i-inventory-ii-accounts-receivable-a-i-only-b-ii-only-c-both-i-and-ii-d-neither-i-nor-ii.html
- https://investwithcarl.com/learning-center/investment-basics/investment-types/liquid-investments
- https://www.investopedia.com/terms/l/liquidity.asp
- https://www.investopedia.com/terms/h/home_equity.asp
- https://gocardless.com/guides/posts/what-is-a-liquidity-ratio/
- https://www.bankrate.com/investing/low-risk-investments/
- https://www.bill.com/blog/liquid-assets
- https://www.empower.com/the-currency/money/what-are-liquid-assets
- https://www.bis.org/basel_framework/chapter/LCR/30.htm?tldate=20210203&inforce=20191215&published=20200605
- https://www.capitalone.com/learn-grow/money-management/liquidity/
- https://www.forbes.com/advisor/investing/best-safe-investments/
- https://www.physicianonfire.com/voo-vs-qqq-which-index-etf/
- https://lyonswealth.com/blog-details/which-investments-has-the-least-liquidity
- https://www.fca.org.uk/investsmart/understanding-high-risk-investments
- https://www.bankbazaar.com/savings-account-guide/which-type-of-account-is-the-most-liquid.html
- https://www.investopedia.com/terms/a/assetqualityrating.asp
- https://www.investopedia.com/financial-edge/0113/7-easy-to-understand-etfs-to-replace-a-savings-account.aspx
- https://agicap.com/en/article/liquidity-asset/
- https://www.investopedia.com/terms/l/liquidasset.asp
- https://www.dca.ga.gov/node/4381
- https://www.indeed.com/career-advice/career-development/order-of-liquidity
- https://www.investopedia.com/articles/mutualfund/07/etf_downside.asp
- https://en.wikipedia.org/wiki/Liquidity_preference
- https://smallbusinessresources.wf.com/5-ways-to-improve-your-liquidity-ratio/
- https://stockanalysis.com/article/voo-vs-vti/
- https://meetseanoneill.com/which-investments-have-the-least-liquidity/
- https://www.ig.com/uk/trading-strategies/what-is-market-liquidity-and-why-is-it-important--190214
- https://www.amfiindia.com/investor-corner/knowledge-center/etf.html
- https://www.investopedia.com/terms/i/illiquid.asp
- https://www.vaia.com/en-us/textbooks/economics/the-economics-of-money-banking-and-financial-markets-12th/banking-and-the-management-of-financial-institutions/q2-rank-the-following-bank-assets-from-most-to-least-liquid-/
- https://groww.in/p/liquidity-ratio
- https://www.matthews.com/thought-leadership-find-profitable-investment-property/
- https://www.investopedia.com/ask/answers/011215/it-important-company-always-have-high-liquidity-ratio.asp
- https://byjus.com/commerce/liquidity-ratio/
- https://www.investopedia.com/articles/basics/08/invest-in-gold.asp
- https://seekingalpha.com/article/4437420-what-are-liquid-assets
- https://brainly.com/question/41571850
- https://www.nasdaq.com/articles/10-most-actively-traded-etfs-of-q4
- https://www.fe.training/free-resources/investment-banking/liquidity/
- https://www.titan.com/articles/etf-drawbacks
- https://www.forbes.com/advisor/in/investing/liquidity-and-liquid-assets/
- https://courses.lumenlearning.com/suny-osintrobus/chapter/the-balance-sheet/
- https://quizlet.com/197860105/what-is-liquidity-flash-cards/
- https://www.forbes.com/advisor/investing/best-low-risk-investments/
- https://www.screener.in/screens/249514/liquid-stocks/
- https://money.usnews.com/investing/articles/best-etfs-to-buy
- https://www.americancentury.com/insights/understanding-etf-liquidity/
- https://gocardless.com/en-us/guides/posts/what-is-a-liquidity-ratio/
- https://byjus.com/question-answer/money-is-the-most-liquid-form-of-assets-becauseit-has-certain-functions-it-acts-as/
- https://economictimes.indiatimes.com/definition/liquid-asset
- https://www.indeed.com/career-advice/career-development/quick-assets
- https://www.cliffsnotes.com/tutors-problems/Finance/48161026--C-Question-7-1-pts-Which-one-of-the-following-accounts-is-the/
- https://www.fidelity.com/learning-center/investment-products/etf/etf-liquidity
- https://steemit.com/realestate/@homekey/selecting-the-most-liquid-real-estate-assets
- https://www.investopedia.com/terms/l/liquiditytrap.asp
- https://moneywise.com/investing/voo-vs-vti
- https://www.westernsouthern.com/investments/liquid-vs-non-liquid-assets
- https://www.usatoday.com/money/blueprint/investing/best-sp-500-etfs/
- https://www.finder.com/savings-accounts/12-interest-savings-account
- https://www.toppr.com/ask/question/which-is-the-most-liquid-measure-of-moneysupply/
- https://www.ig.com/au/trading-strategies/what-is-market-liquidity-and-why-is-it-important--190214
- https://www.usbank.com/investing/financial-perspectives/investing-insights/percentage-of-cash-in-my-portfolio.html
- https://www.bajajfinserv.in/investments/complete-guide-investing
- https://www.toppr.com/ask/question/the-formula-for-liquid-asset-ratio-is/
- https://www.investopedia.com/terms/c/currentassets.asp
- https://nukeyrealty.com/type-real-estate-profitable-investment/
- https://lyonswealth.com/blog-details/10-percent-return-on-investment
- https://www.investopedia.com/ask/answers/021615/what-safest-investment.asp
- https://www.investors.com/etfs-and-funds/etfs/sp500-cheap-etf-pays-off-more-than-everything-else-long-term/
- https://www.forbes.com/advisor/investing/liquidity-and-liquid-assets/
- https://study.com/academy/lesson/classified-balance-sheet-definition-example.html
- https://www.businessinsider.com/personal-finance/what-is-liquidity
- https://aspireapp.com/blog/liquid-assets-explained-examples-uses-and-liquidity-ratios
- https://www.imf.org/external/pubs/ft/fandd/2012/06/basics.htm
- https://www.investopedia.com/terms/l/liquidityratios.asp
- https://www.gold.org/goldhub/research/relevance-of-gold-as-a-strategic-asset
- https://www.elibrary.imf.org/view/book/9781557755988/ch008.xml
- https://www.quickenloans.com/learn/what-are-liquid-assets-and-why-are-they-important
- https://money.usnews.com/investing/articles/best-investments-during-a-recession
- https://www.investopedia.com/ask/answers/032715/what-items-are-considered-liquid-assets.asp
