It is often misunderstood that liquidity is only important when volatility hits. But because liquidity helps ensure consistent bid-ask spreads and flexible trading, it is essential in all markets.
Discover 3 Ways to Measure Liquidity Risk and How to Navigate the Changing Landscape
We launched the first US-listed exchange traded fund in 1993. Today, our suite of innovative and cost-effective ETFs represents 35.8% of the ETF industry’s annual trading volume ($17.3 Trillion) – $133 billion more than Vanguard and BlackRock combined – making State Street SPDR ETFs the secondary market leader. 2
1 Source: ThinkAdvisor survey sponsored by State Street Global Advisors, “The Role of Liquidity in Client Portfolios,” September 2021
2 Bloomberg Finance, L.P., as of 06/30/2021, calculations per SPDR Americas Research.
Bid-Ask Spread, or Spread
The difference between the highest price a buyer is willing to pay for an asset and the lowest price the seller will accept to sell. Bid-ask spreads are a key measure of the liquidity of an asset or security.
The ability to quickly buy or sell an investment in the market without impacting its price. Trading volume is a primary determinant of liquidity.
Total Cost of Ownership
The purchase price of an asset plus the costs of operation.
Important Risk Information
The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.
Bonds generally present less short-term risk and volatility than stocks, but contain interest rate risk (as interest rates raise, bond prices usually fall); issuer default risk; issuer credit risk; liquidity risk; and inflation risk. These effects are usually pronounced for longer-term securities. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.
Equity securities may fluctuate in value and can decline significantly in response to the activities of individual companies and general market and economic conditions.
Because of their narrow focus, sector investing tends to be more volatile than investments that diversify across many sectors and companies.
Frequent trading of ETFs could significantly increase commissions and other costs such that they may offset any savings from low fees or costs.
There can be no assurance that a liquid market will be maintained for ETF shares.
Investing involves risk including the risk of loss of principal.
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Diversification does not ensure a profit or guarantee against loss.
Investing involves risk, and you could lose money on an investment in SPDR® Gold Trust (“GLD®” or “GLD”).
Commodities and commodity-index linked securities may be affected by changes in overall market movements, changes in interest rates, and other factors such as weather, disease, embargoes, or political and regulatory developments, as well as trading activity of speculators and arbitrageurs in the underlying commodities.
Investing in commodities entails significant risk and is not appropriate for all investors.
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GLD has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents GLD has filed with the SEC for more complete information about GLD and this offering. Please see the GLD prospectus for a detailed discussion of the risks of investing in GLD shares. The GLD prospectus is available by clicking here. You may get these documents for free by visiting EDGAR on the SEC website at sec.gov or by visiting spdrgoldshares.com. Alternatively, GLD or any authorized participant will arrange to send you the prospectus if you request it by calling 866.320.4053.
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GLD shares trade like stocks, are subject to investment risk and will fluctuate in market value. The value of GLD shares relates directly to the value of the gold held by GLD (less its expenses), and fluctuations in the price of gold could materially and adversely affect an investment in the shares. The price received upon the sale of the shares, which trade at market price, may be more or less than the value of the gold represented by them. GLD does not generate any income, and as GLD regularly sells gold to pay for its ongoing expenses, the amount of gold represented by each Share will decline over time to that extent.
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Exp Date: 12/31/2022
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