Tradeweb has reported strong net buying of ETFs across all asset classes on its European ETF marketplace in December, a month where total trading activity reached €30.7 billion.
Adriano Pace, Head of Equities (Europe) at Tradeweb.
Over three-quarters (76%) of transactions during the month were processed via Tradeweb’s Automated Intelligent Execution tool (AiEX).
Adriano Pace, Head of Equities (Europe) at Tradeweb, commented, “December capped off a record-breaking year for European ETF trading on Tradeweb. Total notional volume executed in 2019 exceeded €360bn, up 43.5% from 2018 and 117.6% from 2017.
“Since our launch in 2012, we’ve worked hard to provide investors with an efficient mechanism to access European ETF liquidity, and our volumes show how deeply ingrained we are in the European ETF ecosystem.”
Trading activity in equity ETFs increased to 67% of the overall platform flow, beating the previous 12-month rolling average by eight percentage points. ‘Buys’ outstripped ‘sells’ by ten percentage points.
North American equities was the most heavily traded ETF category and saw net buying of 56%. Investors were slightly bearish on European equities with ‘sells’ accounting for 52% of flows within the segment. ETFs providing exposure to global and emerging market exposures were both in demand and recorded buying activity of 57% and 64% respectively.
Trading activity in fixed income ETFs fell to 29% of the platform’s total flow, significantly below its 12-month rolling average of 36%. Investors displayed a positive outlook for the asset class with ‘buys’ accounting for 57% of activity. Corporate bond ETFs were the most heavily traded fixed income segment during the month and recorded 60% buying activity.
Trading in commodity ETFs fell one percentage point below its 12-month rolling average at 4%. ‘Buys’ also accounted for 57% of trading activity within the asset class.
The iShares $ High Yield Corporate Bond UCITS ETF notched up the greatest trading volume during December, resulting in the fourth consecutive month that a fixed income product has led the field. The fund, which has appeared in the top ten list six times in 2019, is linked to the Markit iBoxx USD Liquid High Yield Capped Index and provides exposure to US dollar-denominated high yield bonds from corporate issuers globally. It comes with an expense ratio of 0.50%.
Source: Tradeweb.
US-listed ETFs
Tradeweb reported $10.7bn in notional trading volume on its US ETF platform in December. Equity ETFs accounted for 59% of total volume, fixed income ETFs for 33%, with the remainder comprised of commodity and specialty ETFs.
Sixty percent of trades on the US platform were executed via the Tradeweb AiEX tool.
Adam Gould, Head of US Equities at Tradeweb, said, “Despite the holiday slowdown, trading activity on our US ETF platform remained strong. The number of unique tickers traded was above average, surpassing 600 for the first time in 2019. Looking back at the entire year, total notional volumes increased by 17% vs. 2018, a clear indication of our ability to streamline clients’ workflows and improve their access to liquidity.”