Trading activity on Tradeweb’s European ETF marketplace soared to a record-breaking €25.9 billion in October, beating the previous all-time high in February by €1.9bn.
Adriano Pace, Head of Equities (Europe) at Tradeweb.
During the month, the proportion of transactions processed via Tradeweb’s Automated Intelligent Execution (AiEX) tool exceeded 45%, a new monthly record and significantly up from September’s 39.2% figure.
Adriano Pace, Head of Equities (Europe) at Tradeweb, commented, “We saw ETF volumes reach new heights in October, a month that will be remembered for the surge in market volatility notably affecting US stocks. Despite the market stress, our platform metrics remained strong, and clients were able to unlock liquidity and efficiently execute their orders.”
Activity in equity-based ETFs climbed to 65% of the platform’s total traded volume, outstripping the previous 12-month rolling average by three percentage points. ‘Sells’ in equity ETFs narrowly outstripped ‘buys’ by 51% to 49%.
North American equity ETFs were by far the most heavily-traded ETF category with more than €5.7bn in notional volume, and five of the top ten most traded ETFs during the month hailed from this category.
ETFs providing exposure to European equities were also strongly traded with nearly €4.4bn in notional volume recorded during the month. Interestingly, investors were net bullish on both North American and European equities with ‘buys’ surpassing ‘sells’ in the asset classes by 54% to 46% and 55% to 45%, respectively.
Fixed income ETFs accounted for 31% (€8.0bn) of total platform flow, lagging the previous 12-month rolling average by two percentage points. The proportion of ‘buys’ to ‘sells’ in the asset class was approximately equal during the month.
For the first time since June, commodities were predominantly bought in October with a ratio of 59% to 41%. Overall activity in the asset class dropped to 4% (€1.0bn) of the platform flow, trailing the previous 12-month rolling average by one percentage point.
Source: Tradeweb.
The iShares Core S&P 500 UCITS ETF proved to be October’s most actively traded fund after last holding the top spot in October 2016. Overall, the top ten list featured six equity and five fixed income products.
Source: Tradeweb.
Tradeweb’s US-listed ETF platform
Total consolidated US ETF notional value traded in October amounted to $17.4bn with year-to-date total volume of $81.5bn already exceeding 2017’s full-year volume of $55.2bn by 47.6%.
Equity ETFs accounted for 65.6% of total notional volume during October followed by fixed income ETFs with 26.5% and the remainder comprised of commodity and specialty ETFs.
Adam Gould, Head of US Equities at Tradeweb, said, “Our prediction in September that the fourth quarter of 2018 would be busy certainly came to fruition – notional value traded this month almost tripled year-over-year. The rising rates and declining equities of ‘Red October’ were reflected real-time by robust US ETF Trading on Tradeweb, which experienced an outsized concentration in equity focused-fund activity. Throughout, our systems performed efficiently and resiliently, facilitating a number of large single trades.”
During the month, 625 unique tickers traded on Tradeweb’s US ETF platform. As volatility roiled markets, and yields on the 10-year US government bond jumped, so equities became a focus for investors: eight of the top ten tickers by traded volume on Tradeweb were equities based. The single most traded ETF during the month was the iShares Russell 1000 ETF (IWB US).
Source: Tradeweb.