Bringing you live news and features since 2006 

Athanasios Psarofagis, Bloomberg

European ETP trading stays elevated in 2021 says Bloomberg’s ETF analysts

European ETP trading exceeded EUR2 trillion in fragmented market write Athanasios Psarofagis, ETF analyst and Henry Jim who have produced a report on European ETP trading in 2021.

European ETP turnover topped EUR2 trillion euros for the second straight year in 2021 as industry inflows reached a record. Though BlackRock’s iShares has a sizeable lead among issuers, trading remains fragmented across venues, with multilateral trading facilities handling the biggest share and exchanges expanding their role.

1.    MTFs have biggest chunk of European trading

Request-for-quote (RFQ) services via multilateral trading facilities (MTFs) such as Bloomberg and Tradeweb handle the largest portion of Europe’s ETP trading. The two platforms combined for 38 per cent of traded value in 2021. The over-the-counter share has declined slowly since the start of 2020 as volume shifts to major stock exchanges. The exchanges’ 43 per cent figure is somewhat elevated by their own RFQ platforms, where trading isn’t on-exchange but appears to be. Bloomberg’s MTF accounted for 23 per cent of Europe’s ETP trading and Tradeweb’s 15 per cent. London and Xetra led among exchanges, with about 9 per cent each.

2.    Trading still fragmented in Europe ETPs

Europe-listed ETPs’ trading volume reached EUR2.1 trillion last year, slightly below the EUR2.4 trillion in 2020, which came amid heightened market volatility. Trading levels are elevated overall but fragmented across venues, led by Bloomberg and Tradeweb’s MTFs. 

3.    iShares has Europe’s deepest liquidity pool

iShares accounts for the largest portion of Europe’s ETP trading, averaging 42 per cent of the total value, well ahead of No. 2 Xtrackers. Issuers’ volume is generally in-line with asset share, but WisdomTree, with its lineup of leveraged ETFs, tends to punch above its weight during volatile market periods. WisdomTree usually accounts for 2.5-3 per cent of monthly turnover but approached 10 per cent in March 2020.
ETFs normally make up about 95 per cent of the value traded, while ETCs (exchange traded commodities) average roughly 5 per cent. (01/11/22)

4.    Europe’ ETP trading less top-heavy than US

The fragmented nature of Europe’s ETP market means trading is more spread out, preventing dominance by a few products. Last year’s turnover of EUR2.1 trillion was a strong showing following 2020’s volatility-induced EUR2.4 trillion. Europe’s 15 most traded ETPs accounted for 19 per cent of the region’s volume in 2021, well below the almost 50 per cent for peers in the US. The iShares Core S&P 500 UCITS ETF (CSPX) was the most traded product, at over EUR59 billion euros. 

5.    Liquidity moat harder to build With European ETPs

ETP liquidity tends to be spread out among newer and older products in the European market, where trading is relatively fragmented. In the more concentrated US, 80 per cent of industry turnover is  in funds launched in 2008 or earlier, and products can form large liquidity moats that can be difficult for newer rivals to breach. In Europe, trading share tends to be more aligned with the number of ETPs introduced in a given year.
European offerings from 2009 and 2010 have more than 8 per cent of volume each, while 2018’s led with 12 per cent. 

Latest News

Morgan Stanley Investment Management has announced the launch of an ETF platform with the listing of six Calvert ETFs on..
The UK's HM Treasury has published a note saying that the government will set out ambitious plans to ‘robustly regulate..
Digital asset manager CoinShares has announced that CoinShares Digital Securities Limited, the wholly owned subsidiary and Issuer of the CoinShares..
European white labeller HANetf reports that delighted to announce that Sprott Uranium Miners UCITS ETF (URNM) has now passed the..

Related Articles

ETF
We are very pleased to open the voting for service providers (selected by nominations) and ETP issuers, selected by our data partners, Trackinsight, for the European ETF Express Awards, in...
Bitcoin
Osprey Funds’ founder and CEO, Greg King, has written an open letter to Barry Silbert, majority owner of Digital Currency Group which owns Grayscale, suggesting that he uses his powers...
Captain
Comparing multifactor ETFs to the popular Marvel Avengers series may seem a bit of a stretch but recent analysis from Morningstar suggests the investment strategies have more in common with...
Mackenzie
Canadian asset manager Mackenzie Investments, with CAD186.6 billion under management, has published its annual Mackenzie Investments Year-End ETF Report. ...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by