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Global trends in institutional ETF trading 

October 5, 2017

Risk.net

"Frequency and size of trades – 30% of global respondents execute more than 50 ETFtrades a month and, in Europe, 42% report trading at this frequency. This coincides with a European tendency to use ETFs more tactically. Twenty-one per cent of respondents executed block trades in excess of $100 million in 2016. 

Request for quote (RFQ) platforms – 32% of surveyed traders report using RFQ platforms to execute ETF block trades, with Europe leading the way at 41%. Trading on RFQfacilitates price transparency for ETF users and puts a broader set of counterparties in competition for a given trade.

Order types – Risk pricing (including block trades) dominates execution styles, with 41% of respondents using it most frequently. US institutions favour risk pricing to a much greater extent than their Asian counterparts – by a margin of 44% to 16%. Likewise, heavyweight funds, with assets under management (AUM) in the $50 billion–$100 billion range, outstrip funds with AUM of $1 billion or less in their use of risk pricing by 56% to 29%."

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