Bond ETF Trading Spikes in London
July 6th 2012 at 7:00am by Tom Lydon
U.K. investors are increasingly trading fixed-income ETFs that follow the bond market.
“Investors do not have to construct a portfolio from individual bonds but instead can easily acquire a broad fixed income exposure or a position tailored to their specific needs via a single ETF trade,” Gillian Walmsley, head of ETFs at the London Stock Exchange, said in a Financial Times article.
For instance, across the pond, fixed income ETF trades on the London Stock Exchange have almost doubled over the first half of 2012, with bond ETF turnovers increasing 93% to $24.4 billion in the first six months from $12.6 billion in the same period last year.
Fixed income trades on the London exchange accounted for 121,516 trades in the first half, up 42% compared to the same period last year.
“The LSE has more market maker coverage for ETFs than any other exchange in Europe,” Walmsley added. “Both the LSE and the market makers who use the exchange are committed to providing continuous liquidity and working to improve trading spreads for clients.”
While equity ETF trades were up on the LSE, with trades rising 19% to 591,431, equity funds were down 8.2% due to the risk-off market environment, specificallydue to the Eurozone financial crisis.
Overall, the LSE saw 926,602 ETF trades, a 9% increase in the first half year-over-year, with a 3.3% rise in total value.
For more information on the bonds market, visit our bond ETFs category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.