As 2019 fast approaches, the ETF industry is thriving with net year-to-date inflows of $304 billion in the U.S. with no sign of slowing down.
U.S. ETF total assets currently sit at $3.397 trillion with the average daily trade volume increasing by 46.4% to $99.53 billion as compared to the same period last year, according to XTF data.
In order to launch a successful ETF, an issuer must craft a unique offering that has a specific investment objective, strong internal structure and a compelling marketing message just to have a chance of competing. It’s also imperative that the ETF trades freely and effectively with as much initial exposure as possible as a slow start can hinder the future growth of any ETF launch.
With that in mind, more ETF issuers are making The New York Stock Exchange the exchange of choice for ETF listings. In 2018, NYSE launched 178 new ETFs, a 27 percent increase from its 140 new ETFs launched in 2017. Compared to the other U.S. exchanges, Nasdaq launched 27 ETFs in 2018, a 25 percent decrease from its 36 launches in 2018. Meanwhile, Cboe launched 60 ETFs in 2018, a 45% decrease from its 87 ETFs launched in 2017.
Source: NYSE
Douglas Yones, Head of Exchange Traded Products at NYSE, said NYSE Arca has long-held the industry mantle as “The Home of Exchange Traded Funds.”
Doug Yones
“This year the NYSE launched 178 new ETFs, about three times more than our nearest competitor,” Yones said. “NYSE currently has 1,574 listed ETFs, representing 71 percent of total US listings market share.”
Asked why NYSE is experiencing continued success, Yones responded: “Ultimately, while our peers stand still, we keep moving.”
“We are always on the lookout for ways we can drive enhancements to U.S equities market structure, streamline the listings experience for issuers via new generic listing standards, and developing truly innovative enhancements for the ETF industry such as the NYSE Arca’s new official closing price,” Yones said.
Source: NYSE
Yones told ETF Trends the past three years its success had been built on a four-tiered strategy:
(1) Delivering the best market quality and trading performance has been core to our efforts. We transitioned NYSE Arca on to a state-of-the-art trading platform, called NYSE Pillar. As a result the market quality for ETFs which list on NYSE Arca outperforms our competitors on every given metric.
(2) Building the market’s only truly end-to-end solution to make it easier for issuers to bring their products to market. We offer index development capabilities, index calculation services, the best listing venue for ETFs, alongside sales and marketing support.
(3) Market leadership and innovation – we’ve been driving the industry forward with improved listings standards, market mechanisms to improve resiliency and performance, and most recently we introduced a new data-driven, efficient mechanism for setting an official closing price that more accurately reflects the current value of NYSE Arca-listed ETFs. Since introducing this change, our pricing mechanism has provided global investors with a more accurate reference point of an ETF’s true value.
(4) Providing the best marketing and visibility platform available for ETFs. Our trading floor is home to more than 30 media outlets, which coupled with our in-house social media (2 million followers and counting) and thought leadership platform, enables us to amplify the marketing efforts of our community.
Yones added that in 2018, NYSE also staged more than 2000 events from its iconic 11 Wall Street building, which serves as central meeting point for our industry leaders, their clients, investors and the media.
With the New York Stock Exchange in the heart of Manhattan’s Financial District, it’s now also home to “Fearless Girl” who moved from Bowling Green Park on Broadway Street to outside NYSE on Dec. 10, 2018.
The ‘Fearless Girl’ now stands outside NYSE.
Commissioned by State Street Global Advisors and created by sculptor Kristen Visbal, Fearless Girl was originally installed on Wall Street on the eve of International Women’s Day 2017, accompanied by a call on the companies in which State Street Global Advisors invests to increase the number of women on their corporate boards.