Trading activity on Tradeweb’s European ETF marketplace reached a record-breaking €30.6 billion in July, surpassing the previous record of €29.9bn set in May.
Adriano Pace, Head of Equities (Europe) at Tradeweb.
The proportion of transactions completed via Tradeweb’s Automated Intelligent Execution Tool (AiEX) climbed to a record 68.1%.
Adriano Pace, Head of Equities (Europe) at Tradeweb, commented, “Our European ETF platform has defied the traditional summer slowdown, against a background of plunging bond yields and a reversal of interest rate expectations.
“Trading activity was consistent throughout the month, with average daily volumes reaching €1.3 billion, up 60% year over year and more than double since July 2017.”
Equity ETFs accounted for 59% of total platform flow, one percentage point less than its twelve-month moving average. Buying activity outstripped selling by 53% to 47%.
European equities reclaimed the most active segment with more than €6.5bn in notional volume. ‘Buys’ approximately matched ‘sells’ within the asset class.
Investors were net bullish in trading North American equity ETFs (56% ‘buys’ to 44% ‘sells’) and global equity ETFs (62% to 38%).
Fixed income ETF trading accounted for 36% of total platform flow.
After eight consecutive months of net buying, fixed income ETFs were mostly sold in July with ‘sells’ surpassing ‘buys’ by 51% to 49%. Investors mainly dropped government bond ETFs with selling outstripping buying 58% to 42%.
Commodity ETFs were primarily bought by investors with ‘buys’ to ‘sells’ of 58% to 42%, and the asset class accounted for 5% of total platform flow.
Source: Tradeweb.
Top ten by traded notional volume
Equity and fixed income ETFs were equally represented in July’s top ten list by traded notional volume.
Topping the list is the Xtrackers II EUR Overnight Rate Swap UCITS ETF (XEON GR) which provides exposure to the EONIA (the Euro Over Night Index Average), an effective overnight rate computed as a weighted average of all overnight unsecured lending transactions in the interbank market determined by the European Central Bank. It comes with an expense ratio of 0.10%.
Source: Tradeweb.
US-listed ETFs
Total consolidated US ETF notional value traded in July was $6.1bn. Equity ETFs accounted for 65% and fixed income ETFs for 29% of total platform flow, with the remainder comprised of commodity and specialty ETFs. Nearly 54% of US ETF trades on the platform were executed via the Tradeweb AiEX tool.
Adam Gould, Head of US Equities at Tradeweb, said, “July was a fairly quiet month for US equities. As expected, the Federal Reserve cut rates 25 basis points and broader macroeconomic pressures remained. While a number of widely-followed equity Indices reached record levels, the Treasury market, particularly the yield curve, was a cause for investor concern.”