“The cost of holding a Eurostoxx 50 future, for example, has climbed from an average of 0.07% of the contract value since 1998, to an average of 0.45% over the last year,” reported Juliet Samuel for the Wall Street Journal, citing BlackRock (NYSE: BLK) data, earlier this month.
BlackRock, parent company of iShares, the world’s largest ETF issuer, is looking to expand its footprint in the European ETF market by convincing traders to drop more expensive derivatives products for ETFs. [iShares Looks to Expand in Europe]
The move to ETFs over derivatives comes as part of a broader increase in ETF usage by institutional investors. Earlier this year, a study conducted by Greenwich Associates and sponsored by BlackRock said 46% of institutional ETF investors surveyed allocate 10% or more of total assets to ETFs with 47% saying they expect to boost ETF usage over the next year.
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of SPY.