While most of our coverage centers on exchange traded funds (ETFs) listed in the United States, we realize that they aren’t just a U.S. phenomenon. We might have the largest market for them, but Europe, Asia and Latin America all boast fast-growing ETF industries of their own.
At the end of 2007, the European ETF market had amassed assets of $128.4 billion in 423 funds, reports Paul Amery for Index Universe.
iShares is the leading ETF provider in both here and in Europe, while State Street Global Advisors is the second-largest provider in the United States. The lack of similarity of product providers within the two markets is interesting, but as time goes on there will be more overlaps.
As for asset class, fixed income has almost three times the amount in fixed income that Americans do, thanks to Europeans’ historical preference for bonds. Both markets have a strong domestic bias, but the European equity sector is less interested in overseas investing than the United States is.
More than half of the ETFs in the United States are held by retail investors; in Europe, it’s closer to one-third, but data backing up this figure isn’t easy to find.
Europe has special challenges, thanks to differences between the countries. Most of them might be using the same currency, but their cultures and legal systems are not the same. It’s also typical to have ETFs cross-listed between exchanges, since each country generally has its own. Often, you’ll see primary listings, then secondary ones.
In a country-by-country breakdown, Germany has the largest number of primary listings: 157. It’s followed by France (119), United Kingdom (84), Switzerland (21) and Italy (6).
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.