Introduction
In the world of equities trading, there are various options available to investors. They can choose to trade different types of stocks and major stock indices, or they can invest in mutual funds or exchange-traded funds (ETFs). ETFs, in particular, are a type of tradeable security that encompass a range of different stocks and other assets. In this comprehensive article, we will explore the largest and most popular ETFs, providing valuable insights and information for investors.
Determining the Largest ETFs
To determine the largest ETFs in any category, it is crucial to establish some definitions. In most cases, the size of an ETF is gauged by its assets under management (AUM), which refers to the total amount of money invested in all of the fund’s share classes. The higher the AUM, the higher the trading volume tends to be, resulting in a tighter spread. This can make larger ETFs more appealing to investors due to higher volumes and tighter spreads.
Largest ETFs Overall
As of April 1, 2020, the largest ETFs by AUM are:
- SPDR S&P 500 ETF with $210 billion in AUM
- iShares Core S&P 500 ETF with $120 billion in AUM
- Vanguard Total Stock Market ETF with $73 billion in AUM
This list features the top ten largest ETFs, all of which except one are equity ETFs that track major indices. These ETFs provide investors with a diversified exposure to a wide range of stocks within the respective indices.
Largest Currency ETFs
Currency ETFs offer investors exposure to foreign exchange markets by investing in specific currencies.
As of April 1, 2020, the largest currency ETFs are:
- Invesco DB US Dollar Index Bullish Fund with approximately $982 million in AUM
- Invesco CurrencyShares Euro Currency Trust with $273 million in AUM
- Invesco CurrencyShares Japanese Yen Trust with $234 million in AUM
This list includes the top ten largest currency ETFs, allowing investors to gain exposure to various currencies and their performance against other currencies.
Largest Bond ETFs
Bond ETFs offer investors exposure to fixed income securities, such as US Treasuries and corporate bonds.
The largest bond ETFs as of April 1, 2020, are:
- iShares Core US Aggregate Bond ETF with $68 billion in AUM
- Vanguard Total Bond Market ETF with $50 billion in AUM
- Vanguard Total International Bond ETF with $26 billion in AUM
These top ten largest bond ETFs provide investors with opportunities to invest in various types of fixed income securities, catering to diverse risk and yield preferences.
Largest Commodity ETFs
Commodity ETFs offer investors exposure to physical commodities like natural resources, precious metals, or agricultural goods.
The largest commodity ETFs as of April 1, 2020, are:
- Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF with $1.53 billion in AUM
- Invesco DB Commodity Index Tracking Fund with $752 million in AUM
- iShares S&P GSCI Commodity-Indexed Trust with $477 million in AUM
These top ten largest commodity ETFs allow investors to gain exposure to various commodities and benefit from their performance.
Largest Inverse ETFs
Inverse ETFs are designed to provide returns that are inversely related to a particular benchmark’s performance.
The largest inverse ETFs traded in the US as of April 1, 2020, are:
- ProShares Short S&P 500 with $3.69 billion in AUM
- ProShares Ultrashort S&P 500 with $1.75 billion in AUM
- ProShares UltraPro Short S&P 500 with $1.41 billion in AUM
These top ten largest inverse ETFs allow investors to profit from market downturns or hedge their existing positions.
Largest Industry ETFs
Industry or sector ETFs provide investors with exposure to specific industries, such as technology or real estate.
The largest industry ETFs as of April 1, 2020, are:
- Invesco QQQ with $80.6 billion in AUM
- Vanguard Real Estate Index Fund with $25 billion in AUM
- Technology Select Sector SPDR Fund with $23 billion in AUM
These top ten largest industry ETFs allow investors to focus their investments on specific sectors or industries, enabling targeted exposure and potential returns.
Frequently Asked Questions (FAQs)
How popular are ETFs?
ETFs have witnessed a surge in popularity in recent years, surpassing hedge funds in terms of AUM. However, they still remain behind mutual funds and pension funds in this regard.
What is the size of the ETF market?
As of April 2020, the size of the ETF market exceeds $5 trillion in assets. Bank of America predicts that the ETF market will reach $50 trillion by 2030.
What is the oldest ETF?
The oldest and also the largest ETF by AUM is the SPDR S&P 500 ETF Trust. Established in 1993, it carries the ticker symbol ‘SPY’.
Do ETFs pay dividends?
Yes, ETFs can pay dividends just like individual stocks. When the companies included in the ETF pay dividends, the ETF provider receives the funds and can choose to distribute them to investors or reinvest them back into the fund. This provides investors with potential income or capital appreciation.
Further Reading on Equities
If you are interested in equities trading, we recommend exploring our beginner’s guide to trading stocks and discovering how the stock market can impact the economy. These resources will provide you with a deeper understanding of the equities market and help you make informed investment decisions.