Crypto and ESG dominate Deutsche Börse’s ETP offering in 2020

Stephan Krause, Deutsche Börse

Germany’s Deutsche Börse has published its review of its ETP business for 2020, noting that sustainability, thematic and cryptocurrencies ETFs dominated the year.

The exchange writes that the shift towards passive investments via ETFs and ETPs continued to rise in 2020 with assets under management in ETFs listed on its Xetra exchange reaching a record level of EUR788.1 billion at the end of the year, against the 2019 figures of EUR709.8 billion.

Deutsche Börse identified three main trends across the year: “The continuing strong increase in demand for sustainable ETFs, a high level of investor interest in thematic investments and a high demand for new products related to the cryptocurrency bitcoin.”

“The range of sustainable ETFs continues to grow, and more and more investors are turning to the sustainable version of an established benchmark index,” explains Stephan Kraus, Head of Deutsche Börse's ETF segment. “Last year saw the first ETFs based on the Paris Climate Agreement and the first multi-asset ETFs with an ESG focus.”

In total, 251 products classified as ESG ETFs were available to investors on Xetra at year-end (2019: 149). Turnover in ESG ETFs increased to EUR12.2 billion, up 289 per cent year-on-year (2019: EUR3.1 billion).

The highest-turnover products in this area included ETFs on clean energy with EUR1.35 billion (2019: EUR92.1 million), automation & robotics with EUR1.13 billion (2019: EUR665.5 million), cyber security with EUR799.5 million (2019: EUR366.2 million), Healthcare Innovation with EUR668.2 million (2019: EUR111.7 million).

Cryptocurrencies such as bitcoin also saw a high level of investor interest, with the exchange reporting that, since last year, physically backed ETNs on Xetra have enabled investors to participate in the performance of bitcoin, and that, at times, bitcoin ETNs were among the most traded products in Deutsche Börse's ETF & ETP segment.

“The listing of the world's first centrally cleared bitcoin ETNs on Xetra has increased the attractiveness of crypto investments especially for institutional investors,” says Kraus.

Thanks to central clearing, investors benefit from significantly reduced risks in the settlement of transactions, he said. “Investors can now participate in the price development of bitcoin, without the need of a wallet infrastructure on an unregulated crypto platform,” Kraus said.

Overall, the number of ETFs tradable on Xetra reached a new high of 1,618 at the end of the year (2019: 1,505), as did the trading volume of EUR197.5 billion (2019: EUR127.4 billion) and the 14.5 million orders executed of (2019: 7.5 million).

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