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ETF turnover rises on both sides of the Atlantic, says Deutsche


The turnover of equity exchange-traded funds listed in Europe rose by 13.6 per cent over the week ending July 21, bringing average daily turnover over the month to almost EUR1.2bn, accordi

The turnover of equity exchange-traded funds listed in Europe rose by 13.6 per cent over the week ending July 21, bringing average daily turnover over the month to almost EUR1.2bn, according to the latest weekly guide to ETF liquidity trends issued by Deutsche Bank.

Meanwhile European fixed-income ETF turnover increased by 8.4 per cent to EUR175m, with money-market ETFs remaining the main focus. Total exchange-based European ETF turnover was just over EUR1.52bn.

On the other side of the Atlantic, ETF turnover in the US rose by 8.8 per cent from the previous week to boost total average daily turnover for the month to a historic high of more than USD112bn. Turnover in the S&P 500 SPDR increased by 7 per cent to USD43.3bn, while the PowerShares QQQ Nasdaq 100 had turnover of USD8.9bn and the iShares Russell 2000 of USD8.3bn.

There were two new ETF listings in Europe, the db x-trackers CAC 40 and CAC 40 Short ETFs, both on Euronext Paris. By contrast there were 11 US listings, comprising the launch of the WisdomTree Middle East Dividend Fund on the Nasdaq stock market and State Street’s introduction of 10 S&P sector ETFs on the American Stock Exchange.

Country ETFs remained the leading product area for turnover in Europe with EUR385m, almost a third of total ETF turnover. The Dax funds remain the dominant country products with total average daily volume of EUR182m across five listed products, more than 15 per cent of overall equity ETF volume. As in the US, style ETFs led by short and leveraged products have grown to become third largest segment in the European market with more than 16 per cent of total turnover.

Euro Stoxx 50 ETFs accounted for more than 21 per cent of aggregate turnover, trading a daily average of EUR248m with liquidity split across 10 ETFs and 30 different listings on nine exchanges.

Deutsche Börse’s XTF platform has the largest market share with 33.8 per cent of total turnover and leads in terms of country, sector and style ETFs. Euronext’s NextTrack platform has a 28 per cent market share, while the combined share of the London Stock Exchange and Borsa Italiana is now 22.4 per cent.

Total European equity-related ETF assets under management rose by 4.8 per cent to EUR71.6bn as of July 18, with the EUR16bn share enjoyed by DJ Euro Stoxx 50 ETFs accounting for more than 23 per cent of total European assets. Fixed-income ETF assets under management rose by 1.3 per cent from the previous week to EUR22.8bn. Total US ETF assets under management rose by 3.7 per cent to USD507bn as of July 18.

In the US, short-related ETFs remained popular with the Nasdaq-listed UltraShort Financials ProShares enjoying turnover of USD4.56bn, up from USD3.56bn the previous week, followed by the UltraShort QQQ ProShares and UltraShort S&P500 ProShares each with turnover of USD2.3bn.

Total short ETF turnover rose from USD10.9bn the previous week to USD12.6bn, the third largest category after large-cap and sector ETFs. Leveraged ETFs have also grown to become the sixth largest category, led by the Ultra QQQ ProShares with turnover averaging more than USD1.4bn.

Among the emerging country ETFs the iShares MSCI Brazil ETF had turnover of USD1.44bn, followed by the iShares FTSE/Xinhua China ETF with USD1.1bn. Among developed market country ETFs the iShares MSCI Japan had turnover of USD307m. Among regional funds emerging market turnover was USD3.36bn, while among ETFs tracking developed market regions funds based on the MSCI EAFE (Europe, Australasia and Far East) index turnover rose to USD1.18bn.

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