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On 11 April 2000, Deutsche Börse became the first European stock exchange to start trading in exchange-traded index funds (ETFs) with its XTF segment. The segment has been growing on an ongoing basis ever since: with 651 listed ETFs of 14 providers, fund assets totaling €134.6 billion and an average monthly trading volume of €12.6 billion, Xetra is now by far the leading European trading venue for ETFs.
“As the number one ETF trading venue, Xetra offers private and institutional investors alike the largest product range in the whole of Europe, as well as highly liquid trading and, as a result, very favorable conditions. Issuers benefit from the international scope of our infrastructure and from the low-cost, comprehensive services offered by Xetra as a listing venue”, said Rainer Riess, Managing Director of Xetra Market Development at Deutsche Börse.
The first ETFs on Xetra were based on the European equity indices EURO STOXX 50 and STOXX Europe 50, as well as on the DAX. Today, ETFs on equities, bonds and commodities are available to private and institutional investors also when employing a variety of different strategies such as short, dividend yields or value/growth. Around €93 billion of the current fund assets totaling over €134 billion is invested in equity index ETFs. The iShares DAX ETF achieves the highest trading volume in the XTF segment by far with an average of €1.3 billion per month.
STOXX not only offered the first indices for ETFs in Europe, but has made an ongoing contribution to the development of the ETF segment with its broad range of innovative indices. The most recent example is the STOXX Europe 600 Optimised Marked Quartile index family, which was expanded to include four additional ETFs listed on Xetra this week. All in all, more than 30 percent of the ETF assets in Europe are invested in ETFs on STOXX indices. “Innovative indices and the ETFs launched on them offer a broad investor base cost-effective access to entire themes, sectors and markets, and allow for a whole range of strategies. Successful ETFs are based on transparent, strictly rule-based and tradable indices,” noted Hartmut Graf, head of Deutsche Börse's index business and CEO of STOXX Ltd.
In Europe, more than 40 percent of ETF trading volume goes through Xetra, a figure that is as high as around 95 percent as far as Germany is concerned. The liquidity bundled in this manner narrows the trading spreads and lowers trading costs. In 2009, the bid-ask spread for the 20 most liquid equity ETFs on Xetra averaged only 9 basis points, and came in at an average of 8 basis points in the first quarter of 2010. Blue-chip ETFs are the most liquid instrument group on Xetra.
Click here for an overview of further facts and figures on 10 years of ETF trading in Europe.
