Five exchange-traded funds ranked in the hundred most heavily traded European equities in November 2009, according to research from the markets analysis team at iShares.

The five ETFs, with their respective rankings in the top 100 equities by trading volume, were the iShares DAX (DE) (38^th), the db x-trackers DAX (59^th), the iShares DJ Euro Stoxx 50 (DE) (81^st), the db x-trackers ShortDAX (83^rd), and the db x-trackers DJ Euro Stoxx 50 (99^th).

The market share of European exchange-traded products as a proportion of overall equity market turnover has also risen steadily throughout the last 18 months, reports iShares, from 3% in June 2008 to 12% in November 2009.

This market share figure almost certainly understates the true level of activity in ETPs, iShares adds, since possibly the greater share of European trading takes place off-exchange and is unreported.

However, European ETP trading levels are still some way short of the dominance of exchange-traded funds in the US equity market. According to one recent estimate, the top three most heavily traded stocks in the US are ETFs, with a total of five ETFs in the top ten equities.

According to iShares’ report, Trading European Exchange-Traded Products, the average secondary market bid-offer spread on key funds is now well below pre-crisis levels, and also frequently below the weighted average spread of the underlying index constituents.

For example, the iShares FTSE 100 ETF has exhibited rolling ten-day average secondary market bid-offer spreads of below five basis points since mid-2009, compared to around 10 basis points in summer 2008 and a peak of 20 basis points in October that year.

However, secondary market ETF trading activity is concentrated in certain fund sectors, iShares notes, particularly in regional and country equity funds. Non-delta-one ETFs (primarily simple inverse funds) also have a significant share of turnover, as might be expected for what are largely seen as trading vehicles.