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    Insights

    SPDR® ETFs Throughout the COVID-19 Crisis

    The COVID-19 pandemic has brought unprecedented challenges to markets across the globe, impacting liquidity across nearly all investment vehicles and asset classes. Despite these challenges, ETFs have performed well, providing market participants with liquidity and price discovery when they need it most.

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    The State Street Global Advisors SPDR Capital Markets team analyzed data from across the globe to better understand the performance of ETFs during the pandemic. Learn more about the report below.
     

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    Interview with the authors

    Liquidity Buffers in Volatile Markets

    Born out of the US stock market crash of 1987, ETFs have been tested by numerous market crises. During the COVID-19 crisis, surging ETF trading volume highlights that ETFs continue to function as originally intended — as buffers and sources of liquidity in stressed markets.

    • Globally, ETFs reached record trading volumes in March 2020.
    • ETF trading volumes in the US were highly correlated with March and April’s heightened volatility. 
    • Even with record-high trading volumes, there was very little primary market activity; the secondary market acted as an additional layer of liquidity. 
    ETFs as Liquidity Buffers
    Liquidity and Price Discovery Tools

    Even as bid-ask spreads widen and ETFs trade at wider-than-normal premiums and discounts, investors turn to ETFs to assess the valuation and liquidity of the overall market.

    Take a closer look at:

    • Price dislocation in equity ETFs
    • Discounts on fixed income ETFs
    • Gold ETFs versus gold futures  
    ETFs as Price Discovery Tools
    The Road Ahead Looks Promising

    Throughout the pandemic, ETFs have provided investors with liquidity when they need it most. Continuous enhancements from both exchanges and regulators are also instrumental in promoting resilient markets during the crisis.

    What does this mean for the future? If trading volume is any indication, expect to see ETF adoption continue to rise.

    ETFs in the Aftermath of COVID-19
    Respond to Market Shifts

    Navigate Ongoing Volatility

    Stay up to date on COVID-19’s continuing impact on the markets with our latest research and insight.

    Read the Latest
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    Important Risk Information:

     

    SPDR ETF is the exchange traded funds ("ETF") platform of State Street Global Advisors and is comprised of funds that have been authorised by European regulatory authorities as open-ended UCITS investment companies. SPDR ETFs may not be available or suitable for you.

     

    ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns.

     

    Changes in exchange rates may have an adverse effect on the value, price or income of an investment. Further, there is no guarantee an ETF will achieve its investment objective.

     

    SHARES IN THE FUNDS OF THE SPDR® ETF SICAV, SSGA SPDR ETFS EUROPE I AND SSGA SPDR ETFS EUROPE II PLC MAY NOT BE AVAILABLE FOR OR SUITABLE FOR YOU. THE VIEWS EXPRESSED IN THIS SITE DO NOT CONSTITUTE INVESTMENT ADVICE. INDEPENDENT ADVICE SHOULD BE SOUGHT IN CASES OF DOUBT. NEITHER THE INFORMATION NOR ANY OPINION CONTAINED ON THIS SITE CONSTITUTES A SOLICITATION OR OFFER TO BUY OR SELL SHARES OF THE FUNDS OR ANY OTHER FINANCIAL INSTRUMENT.

     

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    Information related to Mexico

     

    This information does not constitute and is not intended to constitute marketing or an offer of securities and accordingly should not be construed as such. The Funds referenced herein have not been, and will not be, registered under the Mexican Securities Market Law (Ley del Mercado de Valores) and may not be publicly offered or sold in the United Mexican States. Disclosure documentation related to any of the aforementioned Funds may not be distributed publicly in Mexico and shares of the Funds may not be traded in Mexico.

     

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