10 Most Active ETFs for the Fourth Quarter of 2022

 

Following a strong start to the fourth quarter, the U.S. stock market lost its momentum as Christmas approached. The first two months of the quarter saw Wall Street achieve back-to-back monthly gains, a feat not seen since 2021. This positive performance was driven by indications of cooling consumer prices and optimism about a less-hawkish Federal Reserve. Furthermore, the holiday season began on a high note, further boosting confidence in the stock market as November came to a close. However, the rally came to a halt in December when the Federal Reserve raised interest rates by 50 basis points and adopted a hawkish outlook for the coming year. In this context, the exchange-traded fund (ETF) industry has experienced explosive growth, accumulating significant assets amid the turbulence in the stock market. This has led to ample liquidity in the ETF market, with many ETFs experiencing significantly higher trading volumes.

Trading volume is determined by the number of shares traded within a specific period. Higher trading volumes make it easier to buy and sell ETFs, which helps keep bid/ask spreads narrow. Additionally, increased trading volume facilitates the creation and redemption of shares in ETF baskets, which is a crucial mechanism in the ETF market. Authorized participants can create new baskets of ETF shares or redeem them as needed. This mechanism allows ETFs to trade closely in line with their net asset value (NAV).

With that in mind, we’ve identified the top 10 ETFs that have seen higher average trading volumes over the past three months, making them the most actively traded funds according to etfdb.com (see all Category ETFs here).

1. ProShares UltraPro QQQ TQQQ – Average Daily Volume: 233.4 million shares ProShares UltraPro QQQ aims to deliver three times the daily performance of the NASDAQ-100 Index, with an expense ratio of 0.98%. This index tracks the 100 largest domestic and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization. ProShares UltraPro QQQ is the most popular and liquid ETF in the leveraged space, boasting assets under management (AUM) of $12 billion.
2. ProShares UltraPro Short QQQ SQQQ – Average Daily Volume: 135.5 million shares ProShares UltraPro Short QQQ provides three times inverse exposure to the daily performance of the Nasdaq-100 Index, charging an annual fee of 95 basis points (bps). Like TQQQ, this ETF tracks the Nasdaq-100 Index and has AUM of $4 billion.
3. Direxion Daily Semiconductor Bull 3x Shares SOXL – Average Daily Volume: 124 million shares Direxion Daily Semiconductor Bull 3x Shares focuses on the semiconductor sector within the technology industry, offering three times leveraged exposure to the ICE Semiconductor Index. It has amassed approximately $4.1 billion in AUM and charges an expense ratio of 89 bps.
4. SPDR S&P 500 ETF SPY – Average Daily Volume: 91.8 million shares SPDR S&P 500 ETF tracks the S&P 500 Index, holding 504 stocks in its portfolio. It charges investors an annual fee of 9 bps and manages AUM of $360.8 billion. This ETF has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
5. Direxion Daily S&P Biotech Bull 3x Shares LABU – Average Daily Volume: 61.7 million shares Direxion Daily S&P Biotech Bull 3x Shares seeks three times leveraged exposure to the S&P Biotechnology Select Industry Index. It comes with an annual fee of 0.95% and has AUM totaling $950.5 million.
6. Invesco QQQ QQQ – Average Daily Volume: 60.8 million shares Invesco QQQ provides exposure to the 101 largest domestic and international companies, excluding financial stocks, by tracking the Nasdaq-100 Index. It manages AUM worth $150 billion and charges an expense ratio of 20 bps. Information technology accounts for the largest sector allocation at 50%, with communication services and consumer discretionary rounding out the top three sectors. Invesco QQQ has a Zacks ETF Rank #3 with a Medium risk outlook.
7. ProShares Ultra VIX Short-Term Futures ETF UVXY – Average Daily Volume: 46 million shares ProShares Ultra VIX Short-Term Futures ETF offers 1.5 times (1.5X) exposure to the daily performance of the S&P 500 VIX Short-Term Futures Index. It aims to profit from increases in the expected volatility of the S&P 500, as measured by VIX futures contract prices. This ETF has accumulated assets of $674.9 million and charges an annual fee of 95 bps.
8. iShares MSCI Emerging Markets ETF EEM – Average Daily Volume: 45.3 million shares iShares MSCI Emerging Markets ETF provides exposure to large and mid-sized companies in emerging markets. It tracks the MSCI Emerging Markets Index and holds 1,235 securities. China dominates the allocation with a 32% weight, followed by India and Taiwan with double-digit exposures each. This ETF manages AUM of $22.8 billion and charges an annual fee of 68 bps. It has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook.
9. Financial Select Sector SPDR Fund XLF – Average Daily Volume: 44.8 million shares Financial Select Sector SPDR Fund aims to provide exposure to 67 companies across various financial sectors, including diversified financial services, insurance, banks, capital markets, mortgage real estate investment trusts (REITs), consumer finance, and thrifts and mortgage finance. This ETF is highly popular in the financial sector, boasting AUM of $31 billion. It charges an annual fee of 10 bps and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
10. iShares China Large-Cap ETF FXI – Average Daily Volume: 42.7 million shares iShares China Large-Cap ETF offers exposure to large companies in China by tracking the FTSE China 50 Index. It holds 50 stocks in its portfolio, with a slight bias toward the top three holdings. The ETF has significant exposure to the consumer discretionary sector (35.3% weight), followed by financials (26.5%) and communication (18.1%). iShares China Large-Cap ETF has AUM totaling $5.1 billion and charges an expense ratio of 0.74%. It has a Zacks ETF Rank #5 (Strong Sell) with a Medium risk outlook.
11. iShares iBoxx $ High Yield Corporate Bond ETF HYG – Average Daily Volume: 39.3 million shares iShares iBoxx $ High Yield Corporate Bond ETF is the largest and most liquid fund in the high-yield bond space, managing AUM of $17.7 billion. It charges an expense ratio of 0.48% and offers exposure to a broad range of U.S. high-yield corporate bonds. The ETF tracks the Markit iBoxx USD Liquid High Yield Index, holding 1,209 securities in its basket. It has a Zacks ETF Rank #4 with a High risk outlook.

 

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