When evaluating exchange-traded funds (ETFs), relative volume emerges as a crucial indicator of market interest and trading activity. By analyzing this metric, investors can identify ETFs that are actively traded and potentially more attractive. Using the TipRanks ETF Screener, we identified three ETFs with exceptionally high relative volumes, making them compelling buys for investors.
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Relative volume compares an ETF’s current trading activity to its three-month average, providing insights into whether it is being actively traded. An increase in relative volume often signals improved liquidity, which ensures smoother transactions and facilitates easier entry and exit from positions.
Moreover, increased trading activity typically narrows the bid-ask spread—the difference between the price buyers are willing to pay and the price sellers are asking. This reduction in spreads translates into lower trading costs, benefiting investors by making transactions more cost-effective.
In conclusion, ETFs with elevated relative volumes not only capture market interest but also deliver enhanced liquidity and cost efficiency. These attributes make them attractive for investors seeking seamless and strategic trading opportunities.
Vanguard FTSE Developed Markets ETF (VEA)
Vanguard FTSE Developed Markets ETF (VEA) is passively managed to provide exposure to the developed markets ex-US equity space. It holds stocks of any market capitalization. This ETF is currently trading at 1.75 times its average trading volume over the past three months, indicating rising investor interest. The ETF has $135.3 billion of assets under management (AUM). Over the past year, VEA ETF has gained by more than 5%.
United States Natural Gas Fund LP (UNG)
United States Natural Gas Fund LP (UNG) holds near-month futures contracts in natural gas, as well as swap contracts. This ETF is currently trading at 1.6 times its average trading volume over the past three months and has $852.3 million in AUM.
T-Rex 2X Inverse MSTR Daily Target ETF (MSTZ)
The T-Rex 2X Inverse MSTR Daily Target ETF (MSTZ) provides inverse exposure to the daily price movement of MicroStrategy stock (MSTR) and was launched last year. This ETF is currently trading at 1.6 times its average trading volume over the past three months, indicating heightened investor activity.
The ETF could be attracting interest from investors looking to bet against MSTR, which has surged by more than 700% over the past year due to its growing crypto holdings. Additionally, Bitcoin’s price has jumped by over 100% over the past year. Despite this, the MSTZ ETF has plummeted by more than 90% over the past year.
Key Takeaway
In summary, the T-Rex 2X Inverse MSTR, Vanguard FTSE Developed Markets ETF, and United States Natural Gas Fund LP ETFs are seeing higher trading volumes, indicating increased investor interest.
