European-listed ETF platform, Tradeweb, has released figures showing the activity in the fixed income ETF markets following the ECB’s announcement earlier this month.
The firm writes: “On 10 March, the European Central Bank announced a new package of monetary stimulus measures intended to avert deflation and boost economic growth in the euro area. These measures included further interest cuts, a new round of cheap loans to commercial banks, and expanded asset purchases, which will now include non-financial corporate bonds.
“The following day, fixed income ETF activity on the Tradeweb European-listed ETF platform increased to 50.3 per cent as a proportion of the overall traded volume, of which 62.9 per cent was in corporate and high yield bond instruments. “Buys” for corporate bond ETFs were twice as many compared with “sells” on the day.
“Between 14 March and 16 March, activity in fixed income ETFs climbed even higher to 51.5 per cent; corporate and high yield bond products accounted for 36.7 per cent of the volume traded in fixed income ETFs. However, corporate bond ETFs saw seven times more buyers than sellers over the same three days.”
“Since the ECB announcement, we’ve noticed that clients are trading fixed income ETFs significantly more”, says Adriano Pace, managing director of equity derivatives at Tradeweb. “The products typically represent one third of the overall platform activity, so it will be interesting to see if this trend will persist in quieter market conditions”, he adds.