European ETF trading commentary for the week ending 11 December, provided by LaBranche Structured Products Europe (LSPE).
Although the equity market lost around 1% last week, investor appetite for ETFs was strong and LSPE saw big OTC block trades on a daily basis. In the primary market our creation/redemption ratio was 6:1 in favour of creations (due to very large emerging markets creations), while in the secondary market buyers outweighed sellers by 2:1.
Investor focus was on emerging markets and LSPE sold in excess of €350 million of the db x-trackers Emerging Markets ETF (LSE: XMEM), Lyxor ETF MSCI Emerging Markets (NYSE Euronext: LEM), iShares MSCI Emerging Markets ETF (LSE: IEEM), Lyxor ETF China Enterprise HSC (NYSE Euronext: ASI) and iShares FTSE/XINHUA China 25 ETF (LSE: FXC) to institutional clients. We also had very good two-way flows in the Lyxor ETF MSCI EM Latin America (NYSE Euronext: LTM) and iShares MSCI World ETF (LSE: IWRD).
In commodities, investors sold trackers of gold, which lost 5% over the course of last week, in significant quantities almost every day, while LSPE witnessed some large OTC block buyers of the ETFS Corn ETC (LSE: CORN).
By sector, telecoms was still in demand but lost 1.5% last week, while we saw big sales of ETFs tracking the DJ Stoxx Construction and Materials index (SXOP).
We saw buyers of bond ETFs return last Wednesday after a couple of weeks of selling, with renewed interest in corporate and aggregate bond funds such as the iShares Barclays Euro Corporate Bond ETF (LSE: IEAC) and the iShares Barclays Euro Aggregate Bond fund (LSE: IEAG). We also witnessed good two-way flows in the iShares Euro Corporate Bond ETF (LSE: IBCX) and particularly strong demand for both the iShares $ TIPS (LSE: ITPS) and its US-listed counterpart, the iShares Barclays TIPS Bond Fund (NYSE: TIP).
Finally, we saw big inflows in the iShares MSCI North America ETF (LSE: INAA) throughout the week with creations on a daily basis. Please note that the Johannesburg Stock Exchange will be closed this Wednesday (16 December), which will affect the Lyxor ETF South Africa FTSE JS ETF (NYSE Euronext: AFS).
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.