3X Leveraged Financial ETF’s Top The Charts In Trading Volume (FAS, FAZ, SPY, XLF)
3X Leveraged ETF’s are among the most popular ETF’s, with the financial ones leading the way. Direxion’s funds FAZ and FAS account for most of ETF volume topping the charts at 3rd and 4th according to ETF Database. This would make sense because these funds are suppose to be trading instruments and traders are suppose to be in and out of them daily. This would create much more turnover therefore creating large volume surges. Though the volume surge has put the funds on many radar screens giving them too much attention.
“The old saying “any publicity is good publicity” certainly seems to ring true in the ETF industry. Over the last several months, leveraged ETFs have been the subject of intense scrutiny, first from individual investors and analysts, and more recently from regulatory agencies such as FINRA. Despite allegations that these funds are dishonest products that end up harming average investors who don’t understand their nuances, many leveraged exchange-traded products are among the most popular securities in the world, indicating that while they have their share of detractors, they have found widespread acceptance among certain investor groups,” Michael Johnston From ETF Database Reports.
“Most Popular ETFs-While State Street’s SPDR S&P 500 (SPY) and Select Financial Sector Fund (XLF) are the most heavily-traded ETFs, leveraged funds from Direxion and ProShares dominate the top of the list, accounting for half of the top ten ETFs by average daily volume. Because of the complex way these ETFs are structured, they are generally held for only a few hours. Due to the compounding of returns, gains or losses of these funds may become distorted over any period longer than a day. Leveraged ETFs are primarily used by day traders, hedge funds, and other sophisticated investors,” Johnston Reports.
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| Issuer | Fund Name | Ticker | Daily Volume* |
|---|---|---|---|
| State Street | SPDR S&P 500 | SPY | 279.3 |
| State Street | SPDR Select Sector Fund – Financial | XLF | 180.1 |
| Direxion | Financial Bull 3x Shares | FAS | 169.9 |
| Direxion | Financial Bear 3x Shares | FAZ | 147.9 |
| PowerShares | QQQ Trust | QQQQ | 140.8 |
| ProShares | Ultra Financials | UYG | 90.3 |
| iShares | MSCI Emerging Markets ETF | EEM | 76.0 |
| iShares | Russell 2000 ETF | IWM | 61.8 |
| ProShares | Ultra S&P 500 | SSO | 57.5 |
| ProShares | UltraShort S&P 500 | SDS | 45.0 |
*Daily volume in millions of shares, as of 7/20/2009
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