Behind SPY's Liquidity & 2019 Top ETF Performers

Cinthia Murphy, Managing Editor,

The SPDR S&P 500 ETF Trust (SPY) is kind of a legend in the ETF space. It’s the first U.S.-listed ETF; it’s the biggest, with $271 billion currently in total assets. It’s also the most liquid ETF in the market today, trading an average of $18 billion every day.

In an interview with Matt Bartolini, managing director of State Street Global Advisors,’s Lara Crigger explores how this kind of massive liquidity has come to be. The secret isn’t simply a matter of assets under management, but one that involves other factors, such as a deep options market and short-selling.

SPY has the most short interest as a percent of assets of any S&P 500 ETF, according to Bartolini, allowing for arbitrage that feeds into more liquidity. Also, the fund has $400 billion worth of open option interest notional, equating to about 185% of its assets—trading that fuels more liquidity as well, he says.

To put SPY’s liquidity into perspective, consider that SPY has more trading volume on a daily basis than Apple (AAPL).

“It trades more than the entire GDP of Japan, and more than every single Dow Jones index stock combined,” Bartolini said. “Essentially, you have to go down to the 92nd company in the S&P 500 ranked by market cap before you surpass SPY's trading volume, meaning the top 92 combined trade less than SPY does.”

There’s no question that ‘SPY’ is king of liquidity in ETF land.

Liquidity aside, so far in 2019, a look at the top-performing ETFs of the year shows that a strong first quarter for global stocks has been really good for a lot of ETFs. SPY itself is up more than 15% this year.

Some of the most impressive gains thus far in 2019, however, haven’t been in U.S. stocks. The leading performer year-to-date is the Alternative Harvest ETF, a global-in-scope portfolio, with returns of 46%, followed by a roster of China-focused ETFs, among others.

Here’s a look at the best-performing ETFs of the year:

Top-Performing ETFs Of The Year (excluding leveraged/inverse)

Note: Data measures total returns for the year-to-date period through March 29.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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