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BlackRock widens lead in Europe with record EUR173 bn Q1 ETF trading: Bloomberg Intelligence

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BlackRock’s iShares, an undisputed leader among European ETF issuers, pushed further ahead in Q1 with EUR173 billion in trades, triple that of its closest rival, according to new analysis by Bloomberg Intelligence (BI). This is a trend which BI sees extending due to its variety of funds and global reach.

Trading in the fast-growing ETF market is evolving, adds BI, with request for quote still the preferred mechanism for ETF issuers.

Nicholas Phillips, BI Market Structure Analyst, says: “In the European ETF landscape, BlackRock’s iShares shines brightly as its funds continue to gain market share, commanding EUR173 billion of Q1 trading value, a record for Europe. That’s 3x the value of its nearest competitor, Amundi, which traded EUR53 billion and is losing momentum. JPMorgan’s ETFs round out the top 10, with a notable EUR5 billion traded in Q1.

“BlackRock’s reputation and global reach will likely support the current trend as funds emerge as the preferred choice for passive and active investors in the expanding ETF market. The more mature equity market is stagnating amid subdued volatility.”

The European ETF landscape has shifted toward request-for-quote (RFQ) trading in the past few years, propelled by its efficacy in facilitating substantial block trades and swiftly transferring risk to ETF liquidity providers, states BI. RFQ transactions, on average, constituted 48 per cent of the trading activity among the top ETF issuers in Europe in Q1, albeit slightly below the record-setting 50 per cent in Q323-Q423.

The integration of algorithms in ETF trading has expanded market access and enhanced liquidity sourcing and execution optimization. RFQ is likely to maintain its status as the preferred mechanism among traders, owing to its agility and responsiveness to market dynamics.

Nicholas Phillips, BI Market Structure Analyst, says: “BlackRock’s iShares ETFs have the highest collective trading volume in Europe, of which the biggest share (44 per cent) was traded on RFQ platforms in Q1, down five percentage points from Q423. ETF trading on RFQ has gained traction since late 2019 as a more suitable way to execute larger trades. Bilateral trading in Q1 rose to 35 per cent from 31 per cent in Q423, indicating that ETF trading is still evolving.”

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