European ETFs See Trading Surge as Trade War Kicks Off

Europe’s ETF industry registered its four busiest sessions on record, with orders for European exchange-traded funds worth a total of $161.6 billion, following President Donald Trump’s "liberation day" decision to impose swinging tariffs on America’s trading partners, which triggered a huge increase in volatility across financial markets globally.

ETF activity in Europe spiked amid fears that President Trump was determined to provoke a full-scale global trade war following the announcement on April 2 that the U.S. would impose reciprocal tariffs on some of America’s trading partners based on a crude back-of-the-envelope calculation that was widely ridiculed by trade specialists.

European ETFs See Record Trading

Trades involving European-listed ETFs worth an estimated $31 billion were completed on April 3, followed by another $40.6 billion on April 4, as investors reacted to Beijing’s decision to retaliate with a 34% levy on all imports from the U.S.

Stock markets in China and Hong Kong were closed on Friday, April 4, and played catch-up after re-opening the following Monday, sparking a rout across Asia and Europe that spread to the U.S. later in the day. The increase in volatility was again accompanied by huge surges in dealing volumes across stock markets globally with ETF trades in Europe worth $51 billion completed on April 7.

Another turbulent day followed on Tuesday when Beijing vowed to “fight to the end” if the U.S. pressed ahead with steep tariffs. Another $37 billion in European ETF trades were registered on April 8.

For comparison, daily trading volumes for European-listed ETFs averaged $5.7 billion during March, according to ETFGI, a London-based consultancy.

BlackRock's iShares Captures Trading Surge

BlackRock, the world’s largest asset manager, registered record activity levels on consecutive days for its iShares operations in Europe, with ETF trades worth around $17.8 billion completed on April 4, followed by a further $19.9 billion on April 7.

ETFGI data indicate that average daily trading volumes for iShares ETFs were running at around $2.2 billion during March.

A spokesperson for BlackRock said that ETF trading across Europe had remained “very orderly,” with ETFs offering liquidity to investors and providing price discovery during all three of the volatile trading sessions.

The data, which is preliminary, was provided by BlackRock and data providers big xyt and OneTick. Order cancellations and late prints are expected to lead to some revisions to the data over the next few days.

This article was originally published at etf.com sister publication ETF Stream.