Traded notional volume on the Tradeweb European ETF marketplace reached EUR38.2 billion in May, while the proportion of transactions completed via Tradeweb’s Automated Intelligent Execution (AiEX) tool increased to 75.6 per cent.
All ETF asset classes saw net buying for the second consecutive month. Traded volume in equity ETFs increased to 68 per cent of the total platform flow, beating the previous 12-month rolling average by six percentage points. Commodity ETFs also experienced higher trading activity and were mostly bought.
Adriano Pace, head of equities (Europe) at Tradeweb, says: “In May, the bid/offer spread across all quoting dealers on the platform was 66 per cent tighter than the average dealer quote spread. This clearly indicates that by putting multiple dealers in competition via the request-for-quote mechanism, buy-side clients can achieve strong pricing when trading ETFs on platforms like ours.”
There were six stocks-based products in May’s top ten list by traded notional volume, with fixed income and commodity ETFs sharing the remaining four spots. The iShares Core S&P 500 UCITS ETF moved up one place to claim the top spot, followed by the iShares MSCI USA SRI UCITS ETF, a fund tracking the performance of an index composed of US ESG (environmental, social and governance) screened companies.
Total consolidated US ETF notional value traded in May 2021 was USD 26 billion, the platform’s second best monthly performance since March 2020.
As a percentage of total notional value, equities accounted for 58 per cent and fixed income for 36 per cent, with the remainder comprising commodity and specialty ETFs.
Adam Gould, head of US equities at Tradeweb, says: “Although most markets experienced muted volatility in May, trading activity in US-listed ETFs continued to increase. The sheer number of unique ETFs traded on our platform highlights how many different funds are available for money managers to utilise. The electronic RFQ protocol may still be new on equity trading desks, however, the buy-side is certainly finding it beneficial from a pricing, workflow and audit trail perspective.”
During the month, a record 1200 unique tickers traded on the Tradeweb US ETF platform. Credit ETFs made up three of the five most actively-traded products, an illustration of the immense amount of positioning and repositioning in that space. The JP Morgan BetaBuilders Europe ETF reclaimed the top spot after last occupying it in December 2020.