| Though ETFs have been gaining immense popularity in recent years courtesy of their cost effectiveness, transparency, flexibility and tax efficiency, there are still a few misconceptions about the liquidity of the products. Generally, investors seek to trade in liquid ETFs that can easily be purchased and sold on the market without affecting their market price.
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 trading in a particular fund provides easy access to move in and out of that product, keeping bid/ask spreads tight...............................................Full Article: Source
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