LSE extends European ETF market share lead over Deutsche Börse

Aug 15th, 2013 | By | Category: ETF and Index News

The London Stock Exchange (LSE) is the “pre-eminent European venue for ETP listings and trading”, according to Gillian Walmsley, the head of exchange-traded products (ETPs) at the London-based exchange.

LSE extends European ETF market share lead over Deutsche Börse

Gillian Walmsley, Head of Fixed Income and Exchange Traded Products, London Stock Exchange.

And while this might sound like marketing bluster, independent data from Deutsche Bank wholly supports Walmsley’s claim.

According to the German bank’s latest Europe Monthly ETF Market Review, the LSE had a 29.5% share of the European ETF market in July, based on on-exchange trade activity, the largest in Europe and up from 27.2% in June.

Its fiercest European rival, the Deutsche Börse, recorded the second largest share of on-exchange ETF trading with 25.5%, down from 25.7% in June.

Up until last year the Deutsche Börse, via its XTF exchange-traded funds segment,  held the top spot for European ETP trading but has seen its market share steadily slip, a trend continued since being overtaken by the LSE.

In terms of on-exchange value traded for ETFs/ETPs on the LSE, this was £13 billion in July, up by 28% compared to July last year, while total ETF/ETP order-book turnover for the first half of the year was £31.9 billion, up 22% compared to first half of 2012.

Revealingly, in July the LSE was the host exchange for the top three ETPs with the largest inflows across each of the main asset classes – equities, fixed income and commodities. Not one of the ETPs with the largest outflows across these asset classes had its primary listing on the LSE. Year-to-date figures for the exchange are similarly good.

All this is helping the LSE to establish itself as the ‘go-to’ exchange for both cross-listings and new ETP launches. The decision by First Trust, a top ten provider of ETFs in the US, to choose the LSE for its European ETF launch earlier this year was a reflection of this. Equally, in a further sign of venue’s growing significance and appeal to ETP providers, asset management giant Vanguard made its ETF debut in Europe by launching first on the LSE.

Helping to underpin this success are 24 registered market makers, who provide continuous pricing and a high quality pool of liquidity on the exchange’s order-book, and more than 400 brokers and member firms from over 20 countries which are able to trade the ETPs listed on the exchange.

Commenting, Walmsley said: “These latest statistics confirm London Stock Exchange’s place as the pre-eminent European venue for ETP listings and trading. Excitingly, we continue to see strong progress and on-going investor appetite in London for the fastest growing classes of ETPs: fixed income and emerging markets.”

She added: “We believe investors and issuers are drawn to London by the unique combination of liquidity, market maker coverage and the exceptional diversity of products available. The market now has over almost 1,100 products served by 24 market makers – a tally unmatched elsewhere in Europe.”

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