DRW | Best Overall ETF Liquidity Provider/Market Maker (2023, 2022) | Best Market Maker/Authorised Participant – Fixed Income ETFs (2023, 2022) | Best Market Maker/Authorised Participant – Cryptocurrencies (2023, 2022) | Best Market Maker/Authorised Participant – Equity ETFs (2023)
By Bernardus Roelofs, Head of ETF Institutional Sales & Trading, DRW
We are very pleased to win four categories for this year’s ETF Express European Awards. Winning three of the awards last year had more to do with offering competitive prices across multiple asset classes on and off exchange, while this year represents our position as a partner to the growth of the ETF ecosystem. On one hand, the market benefits from better pricings and a more balanced landscape of liquidity providers as well counterparty risk reduction. On the other hand, issuers and exchanges are reaching out to us to discuss new product ideas. One key element of the discussion is always the liquidity provision of ETFs and their distribution, whether this is for equity, fixed income or digital assets.
This is evident in our latest numbers (full year 2022): a notional win-ratio from RFQ platforms (with institutional investors) of 13.6 per cent overall, 8.5 per cent for equity, 23.1 per cent for fixed income and 29.4 per cent for crypto attract counterparties to trade with us. Our pricing capability evolution has resulted in a Bloomberg RFQe ranking of 4th overall among all EMEA price makers. For fixed income our ranking is even higher: 3rd on both RFQe and Tradeweb. This has been accomplished within only two years of actively expanding our product range to cover our counterparties’ requests. In 2022 we traded an ETF volume of USD 1.02 trillion across equity, fixed income and crypto ETFs/ETPs, an uptick of 30.1 per cent versus 2021.
This accomplishment can be attributed to an experienced ETF team of traders, quants, sales, IT developers, dedicated operations team for onboarding and settlement who are dedicated to developing a thorough ETF strategy. Furthermore, DRW is one of the world’s leading market makers, founded in 1992 with over 1700 employees globally. With this global footprint, DRW captures strategic market opportunities by leveraging technology, market analysis and proven risk management. In addition to providing ETF liquidity on and off exchange, DRW also provides liquidity in digital assets (spot & options), listed FICC options and power & energy to institutional counterparties globally.
Further growth is expected in the ETF industry in 2023. The initial area for growth is a continuing move towards responsible investing: more assets will be allocated to ESG, either from fresh or existing investment being switched from non ESG focused funds. Additionally, more ESG ETFs are expected to launch in the equity and fixed income space, providing further investment variety. The second growth area is in active ETFs which are building momentum and expected to have a similar growth path as in the USA. Thirdly, the issuing community are shifting more towards online distribution channels to participate in the expected growth of online ETF savings plans. Finally, the market is expected to welcome further asset managers joining the ETF space, from the traditional mutual fund industry or new entrants focussing on digital asset ETPs. As a liquidity provider we are extremely well positioned to help the industry grow by providing two-way ETF prices across asset classes to institutional investors and by partnering with exchanges, issuers and consultants.