Average daily trading volume for ETFs jumped 83% from July to August, as investors increasingly looked to make use of hedging and liquidity techniques in the face of greater market volatility.
According to Bloomberg, the SPDR S&P 500 ETF Trust, which tracks the benchmark measure of U.S. equities in particular, saw a 105% jump, to 394 million shares per day, for the same time period.
The news services notes, “U.S. stocks produced the biggest gains and losses of the year in August, including a stretch of four days when the Standard & Poor’s 500 Index alternated between rallies and declines of 4.4% or more.
“The reason for the increase in volume comes in lots of shapes and sizes,” Tom Lydon, editor of ETF Trends, told AdvisorOne in an interview Tuesday. “August was not a great month from a market standpoint, and people’s perception of the economy is increasingly negative. As a result, commodities ETFs (specifically gold ETFs) are seeing a surge in volume, as are treasury ETFs as a result of a flight to safety. Volatility-based ETFs, of course, are seeing an increase as well.”