Exchange-traded funds (ETFs) have undoubtedly proven to be one of the great disrupters in modern finance whose importance has continued to grow in the 25 years since they were launched. ETFs can be thought of as hybrid investment products which offer many of the features of mutual funds with the trading liquidity of equities.
ETFs have been the success story of the fund industry during this cycle. Traditionally, they have been closely linked to the advent of passive investing. On this basis, we puncture common myths and answer questions as to where growth in the ETF industry has been greatest in recent years and whether all ETFs are really ‘passive’ products. And how does this influence the common concern that ETFs could potentially trigger a sell-off?
Behind the scenes of every ETF issuer there is a capital market team taking care of an orderly functioning of the ETF market. Dominik Esch, Commerzbank ETF Sales Trading, interviewed three leading issuers to get their view on recent regulatory changes, peculiarities of the European market landscape, and the future of the European ETF ecosystem.
Six years ago Deborah Fuhr founded ETFGI. Today, it is the leading independent ETF and ETP research and consultancy firm offering consulting, research and analytics services for a range of clients, including investors, product issuers, stock exchanges, brokers, trade associations and regulators. There are few people as well-informed when it comes to ETFs and the global ETF market as Deborah Fuhr – a good reason to talk with her about the market in general, the benefits of ETFs and the impact of MiFID II.
I wrote substantially last year about the systematic internaliser regime under the MiFID II/MiFIR regulation and the projections from trading venues and market commentators that it would lead to market fragmentation and volumes to be shift from exchange to these platforms. In this month’s article we take a look at the first few months of MiFIR/MiFID II and see whether that’s the case and also what the current state of the systematic internaliser regime is across Europe, in particular in the ETF space where it is estimated that 70% of trading is done over the counter (OTC).