London Stock Exchange celebrates ten years of ETF trading
- Decade of growth and diversification
The London Stock Exchange is today celebrating ten years since the first Exchange Traded Fund (ETF) was admitted to its markets.
A decade after iShares launched its product tracking the FTSE 100 index, there are now over 240 ETF products available for trading on the Exchange, from nine separate issuers.
Trading activity in ETFs has seen constant year-on-year growth. There has been an average annual growth rate of 69 per cent in the value of ETFs traded, and an average annual growth rate of 100 per cent in the total number of trades.
The range of products available has diversified to include ETFs which track indices based on companies in emerging economies, cleantech and carbon neutral firms and businesses which are Shariah compliant.
To mark the occasion, the Exchange is today welcoming ETF industry specialists to a series of presentations, panel discussions and seminars at its Paternoster Square headquarters.
Commenting on 10 years of ETFs, Rory Tobin, head of iShares International, said:
“This is a significant milestone in the history of ETFs in Europe. ETFs have been characterised by simplicity, transparency, tradability and cost effectiveness, and have thus presented a very attractive value proposition for investors. The recent financial crisis has served to highlight these attributes even more. After ten years, the conversation has certainly moved from 'what is an ETF?' to 'how do I use an ETF?' and even more recently to 'do you have an ETF on…?'. These are exciting times for ETFs in Europe and we look forward to working with investors and educating them as to the investment possibilities that can be realised through usage of ETFs.”
Speaking ahead of his participation in the event Donald Keith, Deputy Chief Executive at FTSE Group, said:
“The last decade has seen ETFs rapidly evolving to offer investors a range of exciting opportunities. At the same time, FTSE has continued to support ETF investment with incredible innovation and growth, increasing investor access and prospects for diversification. By combining our expertise with that of the world’s leading ETF providers, FTSE has opened up a host of robust approaches for ETFs, and we look forward to continuing this effort with the London Stock Exchange and our industry partners.”
Pietro Poletto, Head of ETFs and ETCs for London Stock Exchange Group, said:
“We are delighted to be celebrating this milestone with our colleagues and clients today. The Exchange has been at the forefront of the growth of the European market for these products. Since iShares pioneered ETFs with the launch of its FTSE 100 product ten years ago, our ETF platform has seen tremendous growth in terms of the volume of trading conducted, the number of issuers and the diversity of funds available.
“Showing particular resilience during the volatility and uncertainty of the last two years, ETFs have represented one of the most notable success stories of the last decade. The London Stock Exchange has facilitated the strong, sustained growth of a new kind of trading for both institutional and retail investors.”
ETF trading activity on the London Stock Exchange:
* Comparison between Apr-Dec 2000 and Apr-Dec 2001
** Comparison between Jan-Mar 2009 and Jan-Mar 2010
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Notes to editors:
About London Stock Exchange Group:
London Stock Exchange Group is Europe's leading diversified exchange business, incorporating Borsa Italiana and the London Stock Exchange. With over 500 member firms and more than 3,000 companies quoted across its markets, the Group operates the largest and most liquid equity marketplace in Europe.
The London Stock Exchange itself is the world's most international exchange with more than 600 overseas companies from over 70 countries. These figures include international companies quoted on the Alternative Investment Market (AIM), the London Stock Exchange's growth market, and the world's most successful market for small and medium sized enterprises with over 1,200 companies.
The Group offers trading in a wide range of instruments, holding the number one position in the trading of exchange-traded products (ETFs and ETCs) and through its interest in MTS, is Europe’s leading platform for the trading of fixed income products. Through the Order Book for Retail Bonds and Mercato Telematico delle Obbligazioni (MOT) the Group also offers a comprehensive range of UK and European corporate and government bond trading services. Its Italian Derivatives Exchange Market (IDEM) sees over €2.5 billion worth of trading every day and through EDX London the Group provides a facility for the trading of Scandinavian and Russian equity derivatives.
London Stock Exchange Group also offers post-trade services such as netting, clearing and settlement on an efficient and competitive basis. These include services from Monte Titoli, the Central Securities Depository for all Italian financial instruments, and Cassa di Compensazione & Garanzia (CC&G), which in July 2009 was granted Recognised Overseas Clearing House (ROCH) status by the FSA to operate in the UK.
With the acquisition of MillenniumIT, the Group encompasses a leading developer of low cost high performance trading platforms and financial markets software serving both the industry and the Group's own businesses.
Since February 2010 London Stock Exchange Group has owned a majority stake in Turquoise, a Mulitlateral Trading Facility (MTF) providing pan-European lit and dark equity trading in some 1,700 securities across 17 countries.