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Weekly European ETF Trading Report

Written by Staff

December 12, 2011 16:37 (CET)

After a volatile week for global equities, the Euro Stoxx 50 index finished flat and the S&P 500 index gained almost 1% from the previous Friday’s close. ETF trading volumes picked up from recent levels, but remain below six-month averages, at 88% and 90%, respectively.

Cowen’s primary market volumes were marginally negative (i.e. redemptions outweighed creations), primarily due to investor outflows from bond ETFs.

iShares saw some of the largest bond-related outflows.  Its eb.rexx Government Germany 1.5-2.5 and 5.5-10.5 (DE) ETFs (Xetra: RXP1EX, RXP5EX) had combined outflows of €120 million, while its US dollar and euro Markit iBoxx corporate bond trackers (LSE: LQDE, IBCX) had redemptions totalling €55 million. Lyxor had smaller redemptions from its EuroMTS inflation-linked and 3-5 year government bond ETFs (NYSE Euronext Paris: MTI, MTB), totalling €30 million.

However, ETFs tracking US Treasury bonds and non-financial corporate debt attracted decent inflows: iShares reported creations of US$131 million in its Barclays Capital US dollar Treasury fund (LSE: IBTM) and €60 million in its Barclays Capital Euro Corporate Bond Ex-Financials ETF (LSE: IEXF).

Emerging markets equity ETFs saw buyers last week, most notably in the US ETF market and in iShares’ and Vanguard’s MSCI Emerging Markets trackers (EEM, VWO). In Europe, Lyxor incentivised buyers last week by lowering creation fees in certain ETFs, including its MSCI Emerging Markets ETF (NYSE Euronext: LEM FP) and ETF Russia (NYSE Euronext: RUS FP); the former saw inflows of €14 million for the week, whereas the latter saw outflows of €20 million.

Ranked by on-screen volumes, the ETFs we traded most last week were the iShares Markit iBoxx Euro Corporate Bond ETF (LSE: IBCX), db x-trackers’ MSCI Emerging Markets ETF (Xetra: XMEM), iShares’ Markit iBoxx $ Corporate Bond ETF (LSE: LQDE) and iShares’ Barclays Capital Euro Corporate Bond ETF (LSE: IEAC).  Collectively, these funds represented 60% of our exchange-based turnover.

Within the commodities segment, gold fell to a two-week price low as Europe’s debt crisis boosted the value of the US dollar. However, investors continued to buy ETF Securities’ physical gold ETC (LSE: PHAU), which saw a gain in assets of US$35 million for the week.  Meanwhile, copper’s price dropped on reports of rising Chinese stockpiles.

This Friday (16th December) the Johannesburg stock exchange will be closed, affecting the pricing of corresponding ETFs. Friday also sees the “triple witching” of futures and options contracts, potentially creating higher volatility.




Europe Blog

Friday, January 27, 2012 14:43 (CET)

Posted By Paul Amery

Paul Amery

By comparing two low-volatility offerings in the US, it’s easy to see why ETFs continue to gain at the expense of other funds



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