ETFs Top 30 Percent Of All Equities Trading
By Journal of Indexes Staff

Exchange-traded funds now represent 31 percent of all trading volume in the U.S. equities market, an indication of just how widespread the adoption of ETFs has become in the U.S. The $1.7 trillion in trading volume in August, and the $14.7 trillion in trading volume year-to-date, represent a record year, according to new data from the National Stock Exchange (NSX).

The uptick in ETF trading is no surprise, as its volume as a percentage of overall equities has been steadily on the rise. ETFs' share of total volume had been consistently in the mid-to-high 20s in terms of recent trading volume percentage. The NSX's chief strategy officer, Michael Traynor, said that with the 31 percent mark in August, it is likely that ETFs have arrived at a new benchmark level. NSX also noted that the trading volume does not even take into account execution volume in the underlying securities.

Furthermore, while skeptics may think that ETF trading is concentrated in a few big names, such as SPY and QQQ, the truth is that the growth of trading volume in other ETFs has been increasing on a percentage basis faster than for those flagship products. However, those headline ETFs are doing their part, also: Of the 10 most actively traded equities on a daily basis in the U.S., recently five or six have been ETFs.