Working hard to bring ETFs to market
London Stock Exchange Group: Best European Exchange for Listing ETFs – This year of many anniversaries for ETFs has seen London Stock Exchange Group celebrate its 20th anniversary in listing exchange traded products. Lida Eslami, head of business development for ETPs and IOB, explains that the first ETF in London was listed in 2000, focussed on the FTSE 100.
Sadly, there was no in-person celebration this month due to the Covid-19 pandemic, but there is much to celebrate in the European ETF industry. 2019 saw overall European ETF assets grow significantly, reaching over USD 1 trillion and for London Stock Exchange, it was a year when the number of ETFs listed grew to 1300, with 307 ETCs and ETNs, all tradeable on the Main Market.
London Stock Exchange Group, which also comprises Borsa Italiana, in Milan, and the Turquoise pan-European trading venue, supports not just the listing of ETFs but also the trading platform where buyers and sellers can meet.
Eslami says: “We are proud of the diversity of the products on our markets, with the top 20 most traded in any day including one of the UK’s most popular benchmarks, the FTSE 100, but also fixed income or gold, or the S&P 500. There are a wide range of products in our top 20 most traded ETFs.”
In 2019, ETPs accounted for almost 10 per cent of trading volumes on London Stock Exchange, although early 2020 has seen that figure rise to 13 per cent.
2019 was a strong year with new products coming to the market, including fixed income and thematic ETFs. The overall orderbook for the year was GBP103 billion in ETFs and, London Stock Exchange held a 45 per cent share of markets in ETFs across the exchanges in Europe.
Already in 2020, London Stock Exchange has welcomed 37 new ETFs and two new issuers come to market and average daily trading volume for the year so far has been up at GBP650 million, with most activity in March. 28th of February saw an all-time record in daily ETF trading on the London Stock Exchange at GBP1.5 billion.
“It has been exceptional,” Eslami says. “Our clear responsibility as an exchange is to provide an orderly and functioning marketplace. We continue to support global financial stability and sustainable economic growth by enabling businesses and economies to fund innovation, manage risk and create jobs.”
2019 saw 60 new fixed income ETFs and thematic ETFs have continued to make their debut on the exchange including a 2020 first with medical cannabis ETFs from HANetf and Rize ETFs. Gold has also proved popular with HANetf again launching the Royal Mint’s first gold ETF.
Eslami reports that ESG has also proved a huge trend. “The world is moving to become more green and companies are making the transition to becoming more climate friendly. On the ETF side we are seeing this theme grow with a number of new ESG ETFs coming to market,” she says.
The early 2020 Covid-19 pandemic has seen many companies continuing to operate smoothly with people working remotely. “There are new ETFs in the pipeline and we continue to support issuers in bringing their products to market; people want to continue to do business,” Eslami says.
Head of Business Development, ETP & IOB,
London Stock Exchange Group
Lida Eslami is Head of Business Development for Exchange Traded Products and International Order Book at London Stock Exchange. She joined LSE’s capital market division in 2011 as an ETF product specialist, helping to build and develop the Exchange offering, working with both issuers and trading participants. Prior to this, Lida worked at Deutsche Bank’s ETF structuring and sales team and Fixed Income portfolio management team at Alliance Bernstein. She holds Executive MSc in Finance from London School of Economics & Political Science and BSc in Banking and International Finance from Cass Business School, London.