Fixed Income ETFs: Accessing A Crtical Asset Class

December 22, 2014

Arnaud Llinas

Pietro Poletto

The Exchange Traded space is rapidly evolving, offering investors the opportunity to gain exposure to a diverse range of products and asset classes. One asset class that has become increasingly popular over the last few years is fixed income, reflecting the different approach investors are taking to returns, perhaps in light of the shifting interest rate environment. Against this backdrop, London Stock Exchange continues to grow its market share of ETF trading across Europe, allowing London to see some of the highest concentration of liquidity on its markets and remain the leading institutional market in Europe for ETFs. Total on-exchange turnover for ETFs and other ETPs on London Stock Exchange to date in 2014 is around £140 billion with over 1.8 million trades, bringing the Group’s market share to over 40 per cent of European ETF trading.

We have also grown to become the largest European fixed income ETF market with the highest on-exchange turnover (£30.3 billion year-to-date) for fixed income ETFs, offering ETFs with underlying exposure to sovereign bonds, developed and emerging market corporate bonds, money markets and convertible bonds. Over 80 per cent of the top 20 European fixed income ETFs, by value traded, are listed on London Stock Exchange. We also marked a significant milestone recently, welcoming our 150th fixed income ETF to our markets, further demonstrating London’s ability to offer the widest diversity of products and investor access to global fixed income markets. ETFs are an attractive investment, a low cost approach to accessing a broad range of asset classes which trade like shares, using full order – driven electronic services. All trades executed on London Stock Exchange’s order-book are automatically traded, reported, cleared and settled. Another key feature of ETFs to consider is liquidity.



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