Euronext enjoys ETF growth across the board
Euronext: Best European Exchange for Listing ETFs – 2020 was a very strong year for Euronext’s ETF business, with a significant increase in ETF trading volumes. On-screen trading in 2020 was up 37 per cent from 2019, representing over EUR75 billion, and there were 142 new ETF listings over the course of the year.
Brieuc Louchard (pictured), Head of ETFs, explains that the exchange increased its commercial intensity with ETF issuers in 2020, checking in with clients regularly so as to be sure to keep on top of their needs.
“Our current ETF team is made up entirely of people from the ETF industry,” Louchard says. “We all come from banks and issuers, which means that we truly understand the requests and needs of our clients.”
The exchange also devotes a lot of time to working on improvements to its ETF listing process, already recognised by ETF issuers for being extremely flexible.
With regards to the listing trends, environmental, social and governance criteria (ESG) have become a very important factor in ETFs listed on Euronext. “We have a very strong ESG focus, and we have done a lot to have better ESG identification in our listings so that investors can easily see which ETFs are ESG related.”
In 2019, ESG ETF listings represented 22 per cent of all new ETF listings on Euronext, while in 2020, that figure went up to 62 per cent. Worth mentioning that Euronext was the first exchange in the world with an ETF focused on the ‘Blue Economy’ – the sustainable use of ocean resources, enabling economic growth while preserving the marine ecosystem.
“This trend is explained by what the end investors are looking for,” Louchard says. “ETF issuers have naturally adapted to the requirements of investors, and we are all increasingly conscious of the impact we have on the environment. In the last three to five years, we have seen that many individuals want their investments to embrace sustainability. Like many industry participants, I believe this is no longer a novelty but a new reality that will continue to grow, which is very positive!”
Another change that Louchard has observed is the increase in the popularity of thematic ETFs such as future mobility or disruptive technology. “This movement has arisen from the current necessity to work from home and adapt to living and consume virtually,” Louchard says. “The increase in dedicated products which match this shift in the real economy is a demonstration of how flexible and fast ETF issuers really are.”
Louchard points out that trends in trading are not always the same as for listing. “The bulk of the large trading interest is still on the big vanilla exposures, particularly large blue-chip indices,” he says. “Also, the gold ETCs were very successful over 2020 in our markets.”
Finally, another observation at Euronext throughout 2020 was the rise of the retail investor. Louchard says: “If you look at 2015 to 2019, the retail market share was in average at 8 per cent in our markets, whereas in 2020 it reached 14 per cent. This is a massive increase, which is aligned again with what individuals faced in 2020, being in lockdown, spending more time at home and deciding to develop their investment portfolio by including more ETFs.”
Euronext adapted smoothly to the work-from-home scenario, Louchard reports. “Even before the Covid-19 crisis, we had the tools to work efficiently on a remote basis, but now that we’re using them on a daily basis, it has had no impact on our activity.”
Brieuc Louchard, Head of ETFs, Euronext
Brieuc Louchard joined Euronext in January 2015 as a Business Development Manager for ETFs & Funds and was appointed Head of ETFs in December 2020. Brieuc graduated from the Master in Business Negotiation & International Affairs at Novancia Business School and the Master in Trading – Asset Management at Eslsca Business School. He started his career in 2007 at IT Asset Management, a French Asset Management company where he held several positions in the sales and fund management departments. In 2009, he joined Société Générale CIB as a Sales Trader in the Equities team in London, then in the ETFs & Program Trading team in Paris, particularly in charge of the development of France and Switzerland based clients. Brieuc then joined Carax Institutional Financial Broker, where he was co-head of the Sales Trading desk for ETFs, Equity derivatives and Equities for Institutional clients.