Equity ETFs enjoy surge in trading at expense of commodity ETCs, according to Barclays Stockbrokers

Jun 26th, 2013 | By | Category: Equities

Trading in equity exchange-traded funds (ETFs) surged in May at the expense of exchange-traded commodities (ETCs), according to new analysis from Barclays Stockbrokers, a UK-based execution-only broker.

Equity ETFs enjoy surge in trading at expense of commodity ETCs, according to Barclays Stockbrokers

Equity ETFs enjoyed a surge in trading in May at the expense of commodity ETCs, according to analysis from Barclays Stockbrokers.

Data for May 2013 reveals that equity-based ETFs accounted for 90% of entries in the list of the top ten most-traded exchange-traded products (ETPs) by Barclays clients for the month, up from 50% of top ten entries in April.

The iShares FTSE 100 ETF (ISF) took top spot in May, while the ETFX FTSE 100 Super Short x2 ETF (SUK2) was in third place. Other UK-related ETFs appearing in the top ten were the iShares FTSE UK Dividend Plus ETF (IUKD), the iShares FTSE 250 ETF (MIDD) and the ETFX FTSE 100 Leveraged (x2) ETF (LUK2).

Clients also showed increased appetite for trading Japan equities, with the iShares MSCI Japan ETF (IJPN) taking second place in the ranking of top traded ETPs, up from twelfth place in April. The iShares MSCI Japan Monthly GBP Hedged ETF (IJPH), which offers currency-hedged exposure, also entered the top ten most-traded ETF/ ETC list for the month of May.

The iShares FTSE MIB ETF (IMIB), an Italian equity market tracker, also saw a significant increase in investor interest, confirming its entry in the top ten, while the iShares S&P 500 ETF (IUSA), which tracks US large-cap stocks, moved up one place to fourth.

Meanwhile, there was a dramatic slump in investor appetite for commodities, which previously held a stronger presence in the top ten trades in April, when compared to the month of May. The ETFS Physical Gold ($) ETC (PHAU) was the tenth most-traded ETP in May, down from second place in April, and was the only commodity-based product to appear in the top ten trades for the month. In April, commodity products held five spots in the top ten list.

Overall, Barclays Stockbrokers saw a 26% increase in ETP client trade volumes in May. Importantly, there was also a 12% increase in the number of clients using ETPs, with this being the highest number of clients trading ETPs since September 2011.

Chris Stevenson, product manager at Barclays Stockbrokers, said: “In May we saw clients use their ETF and ETC investments to capitalise on FTSE movements. We also saw appetite for clients investing in Japan, with two ETFs entering the top ten for the month.”

He added: “It was encouraging to see uplift in the number of clients trading ETFs, as investors seek to use ETFs as an investment vehicle for capturing short-term market movements, as well being used as part of investors longer term portfolio construction.”

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