Weekly European ETF Trading Report

July 02, 2009

European ETF trading commentary for the week ending 26 June 2009, provided by LaBranche Structured Products Europe (LSPE).

The week started with solid inflows again into corporate bond ETFs, in particular the iShares Euro Corporate Bond ETF (LSE: IBCX) and the iShares Sterling Corporate Bond ETF (LSE:SLXX). Demand remained strong even as the funds gained in price (there was a 50 basis point rise over the week), and our total creations of these funds exceeded €45million.

We are still creating in decent size in the iShares Sterling Index-Linked Gilt ETF (LSE:INXG), which rose 2% on the week. Brazilian equities saw a big sell-off, probably due to the market’s high correlation to the price of oil, which lost 7% on Monday and Tuesday. Profit-taking was also a factor, since Brazil had outperformed the other emerging market indices in the previous two weeks.

We had a busy week trading sector ETFs, due to end of month rebalancing by investors. We saw decent two-way flows in ETFs tracking the DJ Stoxx 600 basic resources index (SXPP), and good-sized buyers in ETFs tracking the DJ Stoxx 600 telecoms index (SXKP) as Deutsche Telecom may exit the UK market and Vodafone may bid for its UK T-mobile unit. Sellers were also visible in ETFs based on the DJ Stoxx 600 healthcare index (SXDP), which lost 3.7%.

The new ETF Securities Russell Global Gold ETF (LSE:AUCO) jumped 8%, one of the few sector ETFs that performed well during the week. The same firm’s nickel ETC (LSE:NICK) gained 7.5% on low volumes, but the leveraged version (LSE:LNIK) witnessed strong two-way volumes and an 18% gain. ETF Securities lean hogs (LSE:HOGS) lost 7% in price during the week, also on decent volumes.

This report is not an offer to sell or a solicitation of any investment products or other financial product or service, an official confirmation of any transaction, or an official statement of LSPE.


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