Thanks to unique strategies, creativity, transparency, diversification benefits, enhanced tax competences, low turnover and low cost, the ETF industry has been witnessing explosive growth.

In particular, investors seek to trade in ETFs that can easily be purchased and sold on the market, suggesting that the ETF should have enough liquidity. Volume, or the number of shares traded in a particular period, is definitely the most important consideration for determining the liquidity of a particular fund. Higher number of shares provides easy access to move in and out of the product, keeping the bid/ask spreads tight.

Further, greater volume ensures easy creation and redemption of shares in the fund basket, which is a regular and vital mechanism in the ETF. This is especially true as authorized participants (AP) have the ability to create new baskets of ETF shares for underlying securities or redeem them when required. This phenomenon allows ETFs to trade in line with their net asset value (NAV).

Nevertheless, assessing just the number of shares is not a profitable task, as a higher number of cheaper funds can be bought for a given amount of money, leading to increased volumes. As a result, honing in on dollar volume ETFs reveal the true picture of liquidity. Dollar volume measures the number of shares traded multiplied by the share price.  

That being said, we have highlighted 10 ETFs that have seen higher dollar volume this year and are thus the top 10 volume leaders of 2016 as per xtf.com.

SPDR S&P 500 ETF (SPY - Free Report)

This fund tracks the S&P 500 index and holds 506 well-diversified stocks in its basket with each holding less than 3.2% of the assets.

Zacks ETF Rank: #3 (Hold)
Aggregate YTD Volume: $5,388.3 billion
AUM: $212 billion
Expense Ratio: 0.11%
Top Sector: Information Technology (20.8%)
YTD Returns: 10.7%

iShares Russell 2000 ETF (IWM - Free Report)

This ETF targets the small cap segment by tracking the Russell 2000 Index, holding 1982 stocks with each holding less than 0.5% of the assets.

Zacks ETF Rank: #3
Aggregate YTD Volume: $913.1 billion
AUM: $35.8 billion
Expense Ratio: 0.20%
Top Sector: Financials (19.7%)
YTD Returns: 20.8%

PowerShares QQQ (QQQ - Free Report)

This product provides exposure to the 107 largest domestic and international companies excluding financial stocks by tracking the Nasdaq-100 Index. It is concentrated on the top two firms – Apple and Microsoft – that collectively make up for 19.4% of the assets.

Zacks ETF Rank: #3
Aggregate YTD Volume: $768.4 billion
AUM: $42.5 billion
Expense Ratio: 0.20%
Top Sector: Information Technology (57.4%)
YTD Returns: 7.4%

iShares MSCI Emerging Markets ETF (EEM - Free Report)

This fund targets emerging markets and follows the MSCI Emerging Markets Index. It holds 845 stocks in its basket with none accounting for more than 3.8% share.

Zacks ETF Rank: #3
Aggregate YTD Volume: $593.3 billion
AUM: $25.3 billion
Expense Ratio: 0.68%
Top Sector: Financials (26.7%)
YTD Returns: 6.5%

VanEck Vectors Gold Miners ETF (GDX - Free Report)

This product tracks the NYSE Arca Gold Miners Index, which measures the performance of companies involved in the gold mining industry. Holding 52 stocks, it is guilty of concentration on the top two firms – Barrick Gold and Newmont Mining – with over 9% share each.

Zacks ETF Rank: N/A
Aggregate YTD Volume: $459.8 billion
AUM: $8.8 billion
Expense Ratio: 0.52%
Top Sector: N/A
YTD Returns: 41%

iPath S&P 500 VIX Short-Term Futures ETN (VXX - Free Report)

This ETN provides exposure to short-term equity market volatility by following the S&P 500 VIX Short-Term Futures Index Total Return with the help of the CBOE Volatility Index futures contracts.

Zacks ETF Rank: N/A
Aggregate YTD Volume: $337.4 billion
AUM: $1.2 billion
Expense Ratio: 0.89%
Top Sector: N/A
YTD Returns: -70%

iShares MSCI EAFE ETF (EFA - Free Report)

This fund provides exposure to the stocks in Europe, Australia, Asia and the Far East by tracking the MSCI EAFE Index. It holds 936 securities in its basket with none holding more than 1.82% of assets.

Zacks ETF Rank: #3
Aggregate YTD Volume: $329.7 billion
AUM: $59.2 billion
Expense Ratio: 0.32%
Top Sector: Financials (21.1%)
YTD Returns: -1.8%

SPDR Gold Trust ETF (GLD - Free Report)

This fund tracks the price of gold bullion measured in U.S. dollars, and kept in London under the custody of HSBC Bank USA.

Zacks ETF Rank: #3
Aggregate YTD Volume: $323.2 billion
AUM: $30 billion
Expense Ratio: 0.40%
Top Sector: N/A
YTD Returns: 6.4%

Energy Select Sector SPDR (XLE - Free Report)

The fund targets the broad energy segment and follows the Energy Select Sector Index, holding 36 securities in its basket. It is heavily concentrated on the top two firms – Exxon Mobil (XOM - Free Report) and Chevron (CVX - Free Report) – with a combined share of 31.6%.

Zacks ETF Rank: #3
Aggregate YTD Volume: $294.9 billion
AUM: $18 billion
Expense Ratio: 0.14%
Top Sector: N/A
YTD Returns: 26.5%

iShares iBoxx $ High Yield Corporate Bond ETF (HYG - Free Report)

This ETF offers exposure to a broad range of U.S. high yield corporate bonds by tracking the Markit iBoxx USD Liquid High Yield Index. Holding 1038 securities, effective duration and average maturity came in at 3.95 and 4.51 years, respectively.

Zacks ETF Rank: #4 (Sell)
Aggregate YTD Volume: $279.4 billion
AUM: $18.5 billion
Expense Ratio: 0.49%
Top Sector: Communications (24.8%)
YTD Returns: 7.5%