U.S.-listed ETF trading decreased 17% year-over-year to $38T on the back of record-high interest rates where money market fund assets rose to an all-time high at $5.9T.8 Still, 2023 was the second highest year of ETF volumes on record (after 2022).9 iShares ETF volume represented $9.4T of this activity, led by the iShares Russell 2000 ETF (IWM), the iShares iBoxx $ High Yield Corporate Bond ETF (HYG), and the iShares 20+ Year Treasury Bond ETF (TLT). At the same time, U.S. equity markets traded nearly $127T.10 This means that U.S. ETFs accounted for 30% of the total U.S. composite volume in the secondary market in 2023.
U.S.-listed Fixed Income ETFs also saw their second largest year on record at $5.8T, slightly behind last year ($6.1T).11 iShares accounted for 63% of total fixed income ETF trading in 2023 (+3% year-over-year). 12 The iShares iBoxx $ High Yield Corporate Bond ETF (HYG), the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), iShares 20+ Year Treasury Bond ETF (TLT), and the iShares 7-10 Year Treasury Bond ETF (IEF) were the most active iShares fixed income ETFs traded by volume (# of shares).13
Bid-ask spreads for U.S.-listed ETFs tightened year-over-year, as equity market volatility largely subsided. The average bid-ask spread for U.S.-listed ETFs was 24 basis points (bps) in 2023, nearly 1 bp tighter than in 2022. 14 For U.S.-listed iShares ETFs, average bid-ask spreads remained nearly flat at 12 bps in 2023 (roughly 50% tighter than U.S.-listed ETFs overall).15
Trading volumes in options on U.S.-listed ETFs hit record levels in 2023, for both the industry ($130T, +24% year-over-year) and iShares ($8T, +14% year- over-year).16 Notably, options on the iShares 20+ Year Treasury Bond ETF (TLT) traded a record $684B (+27% year-over-year). In addition, options on the iShares Russell 2000 ETF (IWM), and the iShares MSCI Emerging Markets ETF (EEM) also saw notable volume increases year-over-year.17
