"In only three years, the XTF segment has developed into the leading trading platform for ETFs in Europe and has made a major contribution to the success of these products Europe-wide," said Rainer Riess, Head of Stock Market Business Development at Deutsche Börse. Over half of all ETF trading in Europe takes place in the XTF segment. The XTF segment has increased its share of the European market from 45 percent to 56 percent just since the beginning of the year, he added.
In the meantime, exchange-traded funds have become established as products for retail investors. Nearly half of all orders are placed by retail investors. When the segment was launched in 2000, retail investors only accounted for 15 percent of the orders. Retail investors especially profit from the flexibility afforded by exchange-based trading on Xetra and the low trading costs due to the fact that there are no loads and to the high liquidity of the products. One of the main reasons for the high liquidity is the large group of participants consisting of institutional investors and international Designated Sponsors, who function as providers of liquidity on a continuous basis in XTF. As a result, the two ETFs eb.rexx Government Germany EX and DAX EX have developed into the two most liquid securities traded on Xetra.
The XTF segment has been a platform for financial innovations ever since the market launch on April 11, 2000. Deutsche Börse was the first European exchange with a segment for ETFs. The XTF segment was also the world's first to have ETFs listed on the European equity indices Dow Jones STOXX 50 and Dow Jones Euro STOXX 50. In early 2003, the two fixed-income ETFs, eb.rexx Government Germany EX issued by Indexchange and iBoxx € Liquid Corporates by iShares, were the first fixed-income ETFs to be launched in Europe. In March 2002, Unico Asset Management issued the world's first ETF on the MSCI World in XTF and, since early April, has also been offering the world's first ETF on the MSCI Europe. Eurex, the world's leading derivatives exchange and part of the Deutsche Börse Group, is the only European exchange that offers futures as well as options on ETFs and is the first exchange worldwide to offer futures contracts on European ETFs. With XTF, Deutsche Börse also wants to assume the leading role in further developing the European ETF market in the future.
Since the market was launched, the XTF segment has become a permanent feature in Europe. XTF launched with two ETFs, the DJ STOXX 50 LDRS and DJ Euro STOXX 50 LDRS from Merrill Lynch. Over 75 percent of the European trading in these two LDRS ETFs now takes place in the XTF segment. There are now 64 ETFs and 23 actively managed funds listed in XTF.
"Despite the challenging market conditions, ETFs have demonstrated strong growth over the past three years and we are pleased that Merrill Lynch and LDRS have played a part in this," commented Manooj Mistry, ETF Product Manager at Merrill Lynch. "We look forward to continuing this successful partnership with Deutsche Börse."
In March 2003 exchange turnover in XTF reached 4.3 billion euros, with a daily average volume of 206 million euros. This is the second-highest monthly volume since the record month of March 2002, in which 4.8 billion euros in turnover was posted in XTF. Some 33 billion euros in volume was traded in the XTF segment in 2002, compared with 23.8 billion euros in 2001 and 1.6 billion euros between April and December 2000. The assets under management of the ETFs in the XTF segment amounted to 6.2 billion euros at the end of March. Assets under management came to 5.1 billion euros at the end of 2002, 2.7 billion euros at the end of 2001 and 438.5 million euros at the end of 2000.
Further information from the Gruppe Deutsche Boerse is available under http://www.media-relations.deutsche-boerse.com.
