| ETF trading hit a record 30.7% of U.S. stock market turnover in 2022, up from 25.3% the year prior. This suggests a departure from their traditional role as long-term
portfolio building blocks, as investors use them for trading on
short-term market news and events. - In
2022, U.S. ETF trading volumes hit a record high of $44.1T, an increase
of 22.5% year-on-year despite the plateauing of turnover proportion at
25%-27%.
- In the first several months of 2023, ETFs comprised around 30% of trading volumes, demonstrating their sustained significance.
- Domestic U.S. equities ETF direct market trade remained negligible, with 86% of ETF trading on the secondary market.
- The
dominance of passive, index-tracking funds is a concern regarding the
expanding share of ETF trading, although supporters counter that
choosing an index is an active choice.
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